Think About Tomorrow, Today.

Understanding how estate taxes could impact you and your loved ones.

The complexities of estate tax planning are very real — rules and regulations seem to always be in a state of flux. Even when they’re relatively stable, the ins and outs have plenty of intricacies.

At The Helmstar Group, we work closely with several talented estate tax specialists, and always encourage clients to speak with us or another professional about their specific situation.

What are “estate taxes”? Estate taxes are a tax levied on the net value of the estate — your assets minus your debts at the time of your death — before distribution to your heirs. They are above and beyond probate fees (we’ll look at those down the road) and can be quite expensive, as high as 40% for the Federal Estate Tax on transfers above the exemption amount, which currently stands at $5.4 million. Some states also impose estate taxes.

Less than 1% of American households pay any Federal estate taxes.

How do you calculate the “net value” of your estate? In simple terms, add your assets and subtract your debts. Include your home, business, investments, personal property, bank accounts, retirement plans and even benefits from your life insurance. In some circumstances, farms, charitable gifts and other specific assets may also be exempted.

Will my spouse have to pay estate taxes if I die? No, not if everything is handled correctly. 100% of your wealth can be transferred to your spouse without tax.

How can we reduce the amount of estate taxes paid? This answer can be complex, but two primary strategies are: 1) make certain that if you are married you are taking advantage of both exemptions by having the appropriate provisions in a living trust; and 2) reduce the amount of your estate through systematic giving before you pass. While many people’s estates won’t reach levels above the exemption amount, those that do should work with an expert to develop a plan specific to their needs.

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