Raleigh Estate Tax Attorney
Strategies to Limit Taxes and Preserve Wealth
The problem with estate taxes is that the rules keep changing. With the proper approach, however, you can plan for this uncertainty in the tax law and minimize or avoid taxes when your estate transfers to a spouse or children.
Armor Trust Attorneys provides insights and strategies to enable clients with significant assets, to avoid mistakes that would trigger unnecessary taxes. Our Raleigh estate tax attorney counsels families and individuals in Wake, Durham, Orange and Chatham counties. Our estate planning practice will guide you to legally sound strategies for limiting estate taxes and finding the solution that best fits your unique circumstances.
Find out how you can limit taxes and preserve wealth. Contact us at (919) 571-4398 to arrange a consultation.
Which Assets Get Taxed?
Assets that are included in estate tax calculations are: real property, IRAs, life insurance death benefits, stocks, bank accounts and any other property you own at your death.
The Estate Tax Exemptions for 2011 and 2012
Congress recently extended tax cuts and in doing so made the estate tax exemption, gift tax exemption and generation-skipping tax exemption $5 million for the next two years. However, unless Congress extends this, it will expire and return to $1 million on January 1, 2013.
An individual is able to exempt $5 million in assets. A married couple, if they take certain steps, can exempt $10 million. This means that either $5 or $10 million can pass tax-free to heirs, however, the IRS taxes any assets above that at a 35 percent tax rate.
Portability Between Spouses
Only for 2011 and 2012: If a spouse passes away, the surviving spouse can receive the unused portion of the deceased spouse's estate tax exemption. This is called "portability" and is an alternative to using a shelter trust. However, this is only for the next two years.
Trusts: Planning Alternatives
If estate taxes are likely to apply when you or your spouse pass away we can also explore various instruments to shelter assets as much as possible. These trusts are known by many names (Disclaimer Trust, Bypass Trust, Credit Shelter Trust) and work in different ways. We can explain the options for credit exemptions and help you choose the simplest route appropriate for you:
- An Irrevocable Life Insurance Trust (ILIT), if created properly, will remove death benefits paid to the trust from the estate of the insured.
- A Qualified Personal Residence Trust (QPRT) is used to transfer a personal residence that will appreciate in value to family members without incurring federal estate tax on the trust property.
- A Family Limited Partnership (FLP) can be formed to hold family businesses. It can protect assets such as a family farm, timberland, or family-owned business.
- A Qualified Terminable Interest Property Trust (QTIP Trust) allows a deceased individual to provide for a spouse from a second marriage and guarantee the assets are eventually left to the children of the first marriage.
- A Generation Skipping Trust (GST Trust) preserves the trust principal for the grantor's grandchildren, with his or her children receiving only income from the trust, which avoids estate taxes at his or her children's death.
- An Intentionally Defective Grantor Trust (IDGT) removes appreciable liquid assets, such as stock, from an individual's taxable estate.
- A Dynasty Trust can protect the inheritance you leave your heirs from creditors, lawsuits, estranged spouses and future estate taxes through multiple generations.
- The Solution That Serves Your Needs
Our estate tax planning lawyer, Erica Ferranti, has the knowledge to advise and the commitment to protect your interests. We take the time to review your financials, your goals and your risks in order to identify the tax minimization strategy best suited for you.
Contact Our North Carolina Tax Exemption Lawyer
Armor Trust Attorneys is focused exclusively in estate planning, trust management and wealth preservation. Contact our Raleigh office at (919) 571-4398 to arrange a consultation.