A lot of discussion has revolved around estate taxes, to the point that many people believe them to be the most important factor when considering and developing an estate plan. Yet, if we take a look at current tax law, the federal estate tax exemption for U.S. citizens and residents is $5.43 million for individuals and $10.86 million for married couples. With most estates, the U.S. federal estate tax will not apply.
Although it may not apply to you, it is still important to have a plan in place. Typically, most individuals seeking an estate plan are really only considering how they want their assets distributed at death. While many reasons for certain distributions are obvious, it is important to seek an experienced attorney to discuss many issues that may not be apparent. For example, there are many options available for individuals who have special needs children and wish to provide for them without putting their Medicaid eligibility in jeopardy. When transferring assets to your loved ones, it is important to consider all relevant issues to determine the most beneficial plan.
For foreign individuals, the U.S. federal estate tax exemption is only $60 thousand dollars. So for a foreigner who purchases a Miami vacation home, they may have to pay up to 40% U.S. federal estate tax on the value of their vacation home above $60 thousand when they pass away. The federal estate tax not only applies to U.S. real property, but also to other U.S. assets like stock, business interests, etc. An experienced tax attorney can help provide you with options on how to prevent such a costly expense.
When developing an estate plan, there is also something called probate, which is another name for the legal process of administering an estate once a person passes away. If the designations that you have in your estate plan are outdated, the probate process can become significantly onerous, so it’s also important that you update your estate plan when you experience certain changes in your life.
These estate planning tips are brought to you by Bauer Brofsky Law Firm, an experienced South Florida law firm. Some of our areas of practice include estate planning, criminal law, tax planning, personal injury and real estate law. Call 305-712-7979 for a case evaluation or for any questions you may have.