For all of the plans you make and the precautionary measures that you take throughout your life, there are two things you simply cannot escape from: death and taxes. Many in Wyomissing might tell you that the two go hand-in-hand. Indeed, several of those that come to see us here at Huckabee, Weiler & Levengood, P.C. are concerned that much of their estates will go towards paying estate taxes (leaving little to actually go to their beneficiaries). While it is true that there in an estate tax, you should not that there are ways to avoid having to pay it.
First and foremost, however, you should know whether or not you will even be required to. Per Forbes Magazine, the estate tax threshold for 2018 is $5.6 million per individual. What this means is that if the taxable portion of your estate is not above that amount, you (or more correctly, your beneficiaries) are exempt from having to pay federal estate taxes.
Yet even if your estate exceeds the threshold amount, there is still a way to protect a good portion of it. If your spouse survives you, you can gift them the entire amount of your estate up to the estate tax threshold. Be careful, however, in doing this, as it could then push the value of their estate into the taxable area. What you need to do is have instruct your spouse to file an estate tax return the year you die claiming portability. This allows them to claim the unused portion of your exemption and combine it with theirs. Doing so would allow the two of you together to shield up to $11.2 million from estate taxes.
You can learn more about estate tax avoidance by continuing to explore our site.