If you were worried that your beneficiaries would have to pay a lot of your estate in taxes should you pass away during 2018, you just got a lot more breathing room. While the estate tax exemption limit seems to go up a little bit each year, from 2017 to 2018 it doubled! What does that mean for you and your beneficiaries?
Do You Need to File an Estate Tax Return?
In 2018, an estate tax return is not required unless the total value of the estate exceeds $11,180,000. That means most estates are exempt from any taxation at all and beneficiaries will get to enjoy the full use of the funds being left to them. But what can you do if your estate exceeds the exemption limit?
Avoid the Estate Tax
There are a number of ways to ensure that your beneficiaries will experience the least taxation on the assets they receive when you pass on. To get help in planning your estate to leave the funds to your heirs rather than to the government, we encourage you to execute an estate plan and keep it updated by reviewing it annually.
The estate planning attorneys at Petrov Law Firm would be happy to help you execute or review your California estate plan. To schedule a consultation, contact our offices in southern California today by calling 619-344-0360. We look forward to helping you get your future plans down in writing to ensure they will be carried out.Read More
If you are a resident of the state of California, there is something you need to know about present estate tax laws and the possibility of future federal and state regulation changes. Before addressing these changes, it is important to note that this article is for informational purposes and is not an editorial opinion on the part of our law firm.
Here are the facts:
- There presently is no state tax on estates in California. California does not impose any additional taxes on top of the federal estate tax.
- 2017 federal estate tax exemption is $5.49 million. That means your heirs will not pay federal taxes on inherited assets including either estate tax or gift tax.
- Federal estate tax could potentially be repealed. The current president of the United States has suggested that he wants to repeal the estate tax entirely so that the federal government does not take any taxes on inherited funds regardless of the sum.
- If the federal estate tax is repealed, California may implement a state estate tax. State Sen. Scott Wiener has already introduced a bill to introduce an estate tax for the state of California. The idea is that the state can recapture this money freed up by tax cuts offered to the wealthy by the federal government for use by the state, especially for use in education, healthcare, and public transportation and roadways according to a statement made by the senator.
How Estate Tax Changes May Affect You and Your Family
If you are leaving a large estate to family or other heirs, planning your estate properly is more vital than ever. As of now, the federal estate tax on funds exceeding $5.49 million is at 40%. If that number is eliminated by the present administration, it is not known whether California will adopt a statewide estate tax. If this occurs, it is not yet known the percent that will be taxed or how much of an estate will remain tax-free. As this situation continues to develop, working together with an estate planning attorney with your best interests at heart may become even more vital.
Petrov Law Firm would be happy to help ensure that that your heirs receive the maximum amount of your estate. Please call 619-344-0360 today to schedule a consultation.Read More
If you own a large piece of property, especially one untouched by much development, you might consider a conservation easement as part of your estate planning. Conservation easements are a way of keeping property in the family while potentially reducing the tax burden of passing that land from generation to generation.
When you create a conservation easement on your property, you are reducing the value of the land. You are handing over development rights to a public or non-profit organization. Because you or future owners can no longer subdivide or redevelop the land, its value decreases.
The public agency or non-profit organization that holds the development rights through the easement doesn’t own the land. You still own the land. And you can even sell the land. However, because there are significant restrictions on the land, the property value generally decreases significantly. With a decrease in property value comes a decrease in risk for estate taxes as you and further generations pass the land along to the subsequent heirs.
Conservation easements are a great option for those concerned about the effects of a deteriorating environment and encroaching development on a family’s property. Consult with an estate lawyer to see how this unique estate planning option could help preserve wild lands for your future generations.Read More