You may be wondering what happens to your assets after death. This depends on how you managed your estate during your lifetime. Creating a will is the first step in controlling the distribution of your wealth. A will specifies how you want your assets to be allocated after death. Without a will, the state decides how your estate is managed.
Estate taxes can also impact the wealth available to your heirs. These taxes are imposed on the estate’s value before it is distributed to beneficiaries. The larger the estate, the higher the taxes, which reduces the amount of wealth available to your heirs. An experienced probate attorney knows how to leverage strategies to lower the estate tax in Melville probate cases. Let the lawyers at Tully Law Group, PC help you maximize your wealth for future generations.
Probate is the process that validates a person’s will and determines the estate’s value for tax purposes. However, some assets do not go through probate, such as investment and bank accounts with a payable-on-death (POD) or transfer-on-death (TOD) designation, which reduces the taxable estate. Other strategies, like living trusts, may further increase non-probate assets, reducing the total estate tax liability in Melville probate cases.
Estate taxes are levied on a deceased’s estate. In the state, the estate tax rate ranges from 3 to 16 percent, with an exemption threshold. Estates below this threshold are exempt from estate taxes. However, estates exceeding this amount by more than five percent must pay taxes on the entire estate value based on the following rates:
Estates that exceed the threshold by less than 5 percent are only required to pay taxes on the portion above the threshold. It is important to note that the exempt amount increases annually due to inflation. Depending on the size of the estate, taxes could consume a significant portion of it. In some Melville probate cases, the federal estate tax may also apply, further reducing the estate’s value.
*Exact figures are accurate at the time of publishing and may change. Please consult with our office for the most accurate and up-to-date information.
Experienced estate planning law firms like Tully Law Group, PC work with individuals to minimize their estate tax liabilities by using various strategies.
Gifting can reduce the taxable estate and is a common estate planning tool. However, any gifts made within three years before death must be included in the estate’s value. Plus, there are limitations on how much a person can gift before being penalized. A proactive lawyer could advise someone about gifting and the timing of those gifts to minimize taxes.
Different types of trusts, including living, irrevocable, and revocable trusts, can protect assets or transfer them into a trust upon death. It is essential to choose the right type of trust for a person’s needs. Seasoned legal counsel could explain the different options available to them and help them select a trust that aligns with their wishes and reduces their tax liability.
Certain financial accounts like 401(k)s, IRAs, and investment accounts can have payable-on-death (POD) or transfer-on-death (TOD) designations. These designations allow people to transfer these assets to a named beneficiary upon death, preventing them from being taxed.
Resourceful legal counsel in Melville could utilize multiple strategies to help individuals minimize their estate tax in probate cases.
Estate tax in Melville probate cases may significantly reduce a person’s assets available for distribution. By creating a well-structured estate plan, you can help protect your assets and maximize their benefit for future generations. Reach out to the lawyers at Tully Law Group, PC today for assistance with avoiding or minimizing estate tax.
