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Gainesville Estate Tax Planning Lawyer
No one wants any more of their estate going to the tax collector than is absolutely necessary. In the state of Georgia, we’re fortunate–there are no state taxes on the estate of someone who passes away or on the inheritance of their beneficiaries. But there are still federal estate taxes to be dealt with, and there are other estate planning decisions that have tax implications.
Lanier Law Group’s Gainesville estate tax planning lawyers have both legal knowledge and deep financial experience. We’re well-suited to help our northeast Georgia clients protect the value of their estates. Call our office at (770) 343-2414 or contact us online to set up a consultation.
How Trust Decisions Impact Taxation
A trust can be set up to achieve a number of different purposes. From the standpoint of taxes, the key decision that must be made is whether the trust is to be revocable or irrevocable.
Part of setting up the trust is picking the beneficiaries, the same as would be done in a last will and testament. With a revocable trust, the grantor–the person setting up and funding the trust–is free to change the beneficiaries.
The advantage of this is flexibility. New people come into all of our lives. One of them might be someone a grantor wishes to include in a previously established trust. On the less sunny side, the grantor may have a falling out with someone and want to remove them from the trust. A grantor who becomes concerned about the lifestyle of their beneficiaries may wish to adjust the trust and make its benefits conditional on changes (i.e., beating addiction, spending more responsibility, etc.).
Whatever the reason is for the change, a revocable trust allows the grantor to do it. The cost is that they give up tax advantages.
Those tax advantages can be obtained by setting up the irrevocable trust. As the name suggests, this is a trust whose beneficiaries may not be altered. The rewards for giving up flexibility include not counting the assets of a trust in the gross value of an estate at tax time. A grantor is allowed to make an annual contribution that is tax-exempt.
The financial planning background at Lanier Law Group gives our Gainesville estate tax planning lawyers a perspective that clients often find helpful. Call the office today at (770) 343-2414 or contact us online to set up a consultation.
Other Tax Issues in Estate Planning
The federal estate tax kicks in when holdings are valued at $11.7 million or greater. Grantors can reduce the value of their estate–and thereby the tax exposure of themselves and their heirs through other steps as well…
- The annual exclusion allows for gifts of up to $16,000 (a figure periodically adjusted upward for inflation) to be made tax-free. When a grantor anticipates they are nearing the end of their life, they may choose to make use of the annual exclusion to get assets to those they love while steering clear of tax exposure. It certainly bears noting that the $16,000 limit is applied to the person receiving the gift, not the one giving it–so multiple gifts of $16K or less can be made.
- The generation-skipping transfer is applied when wealth valued at more than $12 million goes to a relative two or more generations removed or to someone not related and more than 37 ½ years younger than the grantor. The most common application of this would be someone leaving an inheritance for their grandchild. Those that want to leave substantial gifts to grandchildren can consult with their Gainesville estate tax planning attorney to discuss the most cost-efficient mechanisms for doing so.
Steps that can be taken to lower the value of an estate while still getting assets to intended beneficiaries can have a significant tax impact. The federal estate tax structure has a progressive design, wherein the rate increases as the value goes up. Current rates range anywhere from 18 percent to 40 percent.
Lanier Law Group has estate tax planning attorneys with deep background in financial planning. Our ability to combine sound long-range financial thinking with sharp legal skill helps us work with clients to craft the estate plan best suited to their needs. From our Gainesville office just off I-985, we serve all of Northeast Georgia.
Call Lanier Law Group today at (770) 343-2414 or contact us online to set up a consultation.