Have you considered contacting a tax preparation lawyer in Indianapolis, Indiana? If you’re trying to plan ahead and build a solid future for your family and friends after your death, you’ll need to understand what kind of taxes apply to your estate.
Fortunately, at Dickmann Reason Bogigian & White, we know our way around taxes, and we’re happy to provide all the information you’ll need about what sort of taxes you should expect when you’re planning your estate. Read on to learn a little bit more about estate taxes, who has to pay them, and how you can avoid them, too.
What are estate taxes?
Taxes are one of life’s few certainties, and unfortunately, sometimes they don’t even stop after you die. There are a few different types of estate taxes: Federal, state, and inheritance. The amount your beneficiaries will have to pay varies depending on the state and the estimated value of your estate.
Estate taxes apply in 17 states and the District of Columbia, and depending on where you live, your family might owe up to 40% of the estimated value of the estate. Keep in mind, this estimated value is determined from the current market value of your assets – not how much the assets cost when you first bought them.
Fortunately, there’s one big roadblock that prevents people from owing estate taxes: Estate taxes only apply if your assets are estimated to be worth $11.7 million dollars or more. Additionally, there is a growing political sentiment to get rid of estate and inheritance taxes altogether. While there hasn’t been any action on a national level, many states don’t charge estate taxes. It’s important to contact a tax preparation lawyer in Indianapolis, IN, to learn more about what taxes apply to you – and how you can minimize your tax burden.
How do people avoid estate taxes?
If you have an estate that’s valued at greater than $11.70 million, or if you’re just curious to understand how others avoid hefty estate taxes, you can read up on a few methods that usually reduce the overall tax burden. Most of these methods involve reducing the size of the estate so it doesn’t reach the $11.70 million threshold, and depending on your financial situation certain solutions might work better than others.
One of the most straightforward ways to avoid estate taxes is to simply gift away your assets while you’re alive. This keeps your beneficiaries from owing taxes on the assets they get after your death, and reduces the overall value of your estate before your death. Others decide to invest in businesses that are jointly owned and operated by their heirs, or open charitable trusts or foundations to protect assets from any steep estate taxes.
There are many ways to avoid estate taxes, and in some cases you won’t even have to worry about them. But to be safe, you should always reach out to a qualified tax lawyer so you understand how to protect your assets.
Reach out to Dickmann Reason Bogigian & White today.
At Dickmann Reason Bogigian & White, we understand that your estate is your legacy, and the last thing you’d want is to erode your legacy with steep taxes after your death. Contact us today, and see how a tax preparation lawyer in Indianapolis, IN can help you prepare for your future.