Estate Tax Planning In Ohio
You have worked hard to grow your assets and wealth, and you want to leave your investments and property to your loved ones. However, you are concerned that a large portion of it will go to the government due to estate taxes. While that might be true without planning, the Jarvis Law Office can help you minimize your estate tax burden. Then, instead of losing your wealth, it will continue to grow in the next generation.
Contact our Southeast and Central Ohio estate planning lawyer today for a free consultation. After reviewing your case, the attorney will develop a custom estate planning strategy to help you hold onto your assets.
Estate Tax Planning Strategies
Our Central and Southeast Ohio estate tax planning lawyer utilizes numerous estate planning tools and strategies to reduce your tax burden, secure your business interests, and protect your familyโs future. These strategies include:
- Charitable trusts
- Irrevocable Trusts
- Spousal Lifetime Access Trusts
- Life insurance trusts
- Gifting
- Re-titling assets
- Grantor-retained annuity trusts
- Qualified personal residence trusts
Your estate plan will protect you today and in the future. Contact our estate planning attorney today for more information on how you can enjoy estate-related tax benefits.
Here Today Gone Tomorrow – Will The Federal Government Take 40% Of Your Wealth?
While most Americans wonโt be impacted by federal estate taxes, some families will be. Planning to prevent or minimize this loss is crucial to being able to pass wealth to future generations. If the idea of losing 40% of what youโve accumulated to the Internal Revenue Service (IRS) and other entities makes your gut wrench, then itโs time to take action.
While there are effective strategies to reduce and even eliminate having to pay nearly half of what youโve worked for in taxes, these strategies often need time to be fully effective.
Reduce Estate Taxes With A Gifting Strategy
Your Ohio estate tax planning lawyer knows the tax laws and can help you develop a gifting strategy. First, you can gift up to the annual exclusion each year to lower your taxable estate. As of 2021, you are allowed to gift up to $15,000 per person. For instance, you can gift $15,000 worth of property to one child and $15,000 worth of cash to another without going over the annual exclusion limit. If you have a larger gift, your attorney can help you break it up over several years so you wonโt have to pay taxes on it.
Your attorney might also advise gifting to your spouse as part of an asset protection planning strategy. You can gift up to $159,000 a year if your spouse isnโt a United States citizen. Otherwise, there is not a limit on tax-free gifts to spouses. While gifting to your spouse doesnโt always make sense, it is a sound legal strategy in some cases. Thus, consult with your attorney to see if it is a wise strategy for you.
Irrevocable Trusts
Irrevocable trusts are another option to remove assets from your estate. Youโll choose a trustee to manage the trust, and that person will make all of the decisions. Once the property is inside the trust, itโs no longer part of your estate and not subject to taxes. Then, when you pass away, your beneficiaries will receive the property.
If you have a great deal of wealth, an irrevocable trust might be a wise choice. Talk to an Ohio estate tax planning lawyer to go over the benefits of the trust. Then, your attorney can set one up for you if you wish.
Spousal Lifetime Access Trusts
A Spousal Lifetime Access Trust or SLAT is a type of irrevocable trust, which simply means there are certain changes you canโt make after it is created. This type of trust enables one spouse to make a gift to the other, even while both spouses are still living. This allows the couple to maximize both of their lifetime gift-tax exclusions. This is important for couple with more than $12.06 million in assets in 2022. By making a gift to the SLAT, these funds are removed from the coupleโs estate and thus are no longer subject to the federal estate tax. This will help reduce the amount that would otherwise have to be paid in estate taxes upon the second individualโs death.
The current Federal Estate Tax rules will โsunsetโ in 2025. If nothing changes by then, the new Federal Estate Tax limit will drop to about $6.2 million per person or about half the current amount allowed to be passed on free from estate tax.
When Is It Time To Start Estate Tax Planning?
Itโs wise to start early when it comes to estate tax planning. The federal government will review the transfers from your estate for the three years prior to your death. Then, the government can impose taxes on those assets after the fact. Thus, strategic planning now can save your estate and loved ones a great deal of money.