The estate tax is totally separate from federal income taxes and is paid on the net value of all your assets owned at your death. However, there are fairly sizable exemptions to the estate tax, so it’s primarily high net-worth individuals and their families who are affected.
That said, the estate tax rate is a whopping 40%, so we’re talking about potentially massive sums of money being owed by one’s heirs. And that bill must be paid to the IRS within 9 months of the decedent’s death.
Notably, President Trump’s Tax Cuts and Jobs Act of 2017 nearly doubled the allowable exemptions to the estate tax, ensuring that even fewer families will be affected:
Estate tax exemption for individuals expanded from $5.4 million to $11.2 million.
Estate tax exemption for married couples expanded from $10.9 million to $22.4 million.
So unless your estate is valued at more than $11.2 million, you won’t have to worry about the estate tax at this time. But for those who are affected, there are numerous estate planning strategies available that can greatly reduce the amount owed. Our estate tax planning lawyers can advise you on the best options for your family.
You worked hard to build your family’s wealth and legacy, so it makes sense to put similar effort into protecting those assets—and that includes protecting them against excessive taxes. Contact the estate tax planning attorneys at Succession+ to minimize the potential tax burden faced by your family, so you can maximize the inheritance you pass to them.
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