Gifting and Estate Tax Issues

The federal estate tax exemption has hovered near $5.5 million (almost $11 million per couple) for years. In an estate that crosses this threshold, the federal tax rate is 40 percent. This does mean that all states follow the same approach. Currently, there are 15 states and the District of Columbia that assess an estate tax and six have an inheritance tax.

At Silver Tax Group, we help individuals and families find comprehensive solutions to the limit tax surprises down the road. Our breadth of experience allows us to provide solid tax planning. Our attorneys practice on a national scale and can help you assess your state tax liability both in the short and long term.

Do you own a family business or a vacation home on one the great lakes or in the mountains? You need to consider the tax consequences that will come with any transfer to the next generation. And it is not simply federal taxes.

State Estate Taxes

The threshold that triggers a state estate tax assessment varies from about $1 million in Oregon to the Hawaii and Delaware that match the federal exemption. The tax rate varies even more widely from less than a percent to 20 percent as a top bracket in Washington State.

State legislation is constantly changing. For example, in Tennessee, the estate tax was phased out in 2016 and New Jersey will phase its out by 2018. Several states and the District of Columbia have also considered or have raised their exemption amounts.

Inheritance Taxes

How do inheritance taxes vary from estate taxes? These taxes vary based on the relationship to the person who passes away. For example, a New Jersey spouse or child receives a gift that is exempt from inheritance tax. A brother or sister receiving a gift over $25,000 would pay a graduated inheritance tax.

Tax Advice For The Long Term

Because each state has different laws and each family situation is different, it is crucial to seek advice on the tax consequences during the estate planning process. Our attorneys understand the tools (various types of trusts) available to mitigate the tax burden. Schedule a free case evaluation by contacting us now.