You may be at peace knowing that the gross net worth of your assets, which you worked so hard to build up, may be more than enough to financially support your loved ones when you are no longer around. However, you must sooner consider the countable net worth of your assets. That is, serious tax implications on your estate may affect how much your beneficiaries ultimately inherit. Continue reading to learn whether there is a conceivable plan for minimizing your estate taxes and how an experienced Putnam County estate planning attorney at the Law Office of Andres D. Gil, PLLC can help execute it.
How much will my estate be taxed in New York State?
Unfortunately, New York does impose a state-level estate tax on its residents. This tax may even apply if you are not a full-time resident of New York State but still have property within its state lines included in your estate plan. Of note, this tax rate may be between nine to 16 percent if your assets total more than $6.94 million, as of 2024.
You must understand that this state-level estate tax may be in addition to a federal-level estate tax. This is if your assets total more than $13.61 million, as of 2024. All in all, as the old saying goes, with more money comes more problems.
Is there a strategy for minimizing my estate taxes?
You cannot escape your legal obligation to pay taxes, even in death. However, to reiterate, you may only have an estate tax obligation if the net worth of your estate is large enough. In other words, you can minimize or eliminate the state and federal taxes imposed on your estate altogether if you can reduce the value of its assets.
The most popular strategy for this is establishing an irrevocable tax trust. With this, you may surrender your legal rights over certain assets and transfer ownership to the trust itself. This way, these certain assets may no longer be counted toward the gross net worth of your estate, overall reducing its value. All the while, your beneficiaries may still inherit these certain assets as you intended upon your passing.
Without further ado, below are other common strategies for minimizing or eliminating estate taxes:
- You may set up a family-limited partnership during your lifetime.
- You may set up a special use real estate valuation during your lifetime.
- You may incorporate a charitable trust or charitable transfer into your estate plan.
- You may make gifts to your children, grandchildren, or minor beneficiaries throughout your lifetime.
- You may incorporate a marital trust, irrevocable life insurance trust, or qualified personal residence trust into your estate plan.
In conclusion, what you need the most is likely strong legal representation from a skilled Putnam County estate planning attorney. Someone at the Law Office of Andres D. Gil, PLLC is eagerly waiting for you to reach out.