Jupiter ● Palm Beach Florida Estate Planning Attorney
Our tax practice involves the laws related to transferring wealth and taxation of the income created by the plans we create. While our goal is to minimize taxes of whatever type related to our practice areas, we guide our clients to balance tax and non-tax issues according to their priorities, using computer-assisted and other advisory strategies tailored to their goals.
Attorney Craig F. Snyder can help minimize estate, gift and generation-skipping taxes, and can help you transfer your wealth. He provides related estate planning services across Southeast Florida.
Liquidity, Gift Giving, and Estate Planning
When it comes to taxes, the cost to transfer your lifetime accumulations to your chosen beneficiaries can be significant. Current tax rates exceed 40 percent. As your attorney, Craig F. Snyder can explain the options available to you for minimizing or reducing the costs associated with asset transfers.
Since the final tally of the transfer tax is made on the date of your death, the following example illustrates what can go wrong if you fail to plan properly:
Suppose your estate is worth $5 million upon your death. Due to the nature of the assets, liquidating or selling within the nine months needed to pay the tax is not a good option - you need a loan to pay the tax bill. The assets involved will remain at a value of $5 million until 7 months after your death. Afterwards, market forces will push them down to $4 million. Your estate tax, based on the initial value of $5 million, is $1.35 million. Assuming you can get a secured loan on the $4 million actual value - and excluding interest on the loan - your beneficiaries will net $2.65 million instead of $3.65 million. Under this scenario, essentially 50% of your estate was lost, even though the tax rate was in the 40% bracket.
Frequently asked Questions about Estate Tax
Q. Since the estate tax is repealed in 2010, that means I don't have to plan for estate taxes, right?
A. Incorrect. While the estate tax is currently repealed for deaths within the year 2010, there is an estate tax before and after 2010 that may be applicable, based on your year of death and the value of your estate at that time. Most importantly, since many estate plans reference the estate tax to create post-death gifts, it is wise to update this important language to avoid mistakenly disinheriting a desired beneficiary during a period of changing tax rules.
If your questions are still unanswered, please contact us.
