Estate planning can have different goals for different people in different circumstances. One goal that should always be factored into estate planning, though, is estate tax minimization. For many Americans, federal estate taxation isn’t presently much of a concern, since the estate tax exemption amount is currently at $5.45 million. That means that Americans dying with less than $5.45 million in assets will not end up owing any estate tax.
Depending on where you live and how much money you have to your name, estate taxation at the state level a may or may not be a concern, either. Here in New York, the exclusion amount for estate tax is fairly large, as at the federal level, though it varies depending on when one dies.
Individuals who die between April of this year and the end of next March will not owe New York estate tax as long as the value of their federal gross estate plus includable gifts does not exceed $4,187,500. That amount changes to $5.25 million for those who die between April 1, 2017 and the end of December 2018.
The degree to which one should be concerned about estate tax liability depends on various factors. Estate tax is certainly a concern for individuals whose estate is currently worth over the state and federal exclusion/exemption amounts. It is also a concern for couples in which the estate value for a surviving spouse would exceed the exclusion/exemption amount after the surviving spouse takes ownership of the deceased spouse’s estate.
Couples and individuals who are at risk for estate tax liability should, of course, work with an experienced estate planning attorney to come up with an appropriate plan to minimize what they owe in estate tax, and to integrate estate tax minimization into their other estate planning goals.
Additional resources provided by the author
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