Is it possible to minimize the impact of estate taxes?

When planning your estate, you probably have questions about how best to provide for your family. Can you limit the time and costs of the probate process? How can you limit the impact that taxes have on your estate?

Florida, unlike many other states, does not charge estate taxes. However, your estate may still be subject to federal taxes, and you should consider your tax liability when planning your estate.

Consider federal tax exemptions when planning.

Because of estate tax exemptions, most people avoid estate taxes at the federal level. For 2020, only estates with a taxable value of $11.58 million or more will be liable for federal estate taxes.

Other exemptions may also apply to your estate. The assets left to your spouse qualify for the unlimited marital deduction, allowing your spouse to inherit any amount without the burden of taxes.

Another detail to consider is portability. This process allows any tax exemption that remains unused from one person’s estate can be added to their spouse’s exemption when they pass. This means that if you leave your entire estate to your spouse and utilize the unlimited marital deduction, portability doubles the federal estate tax exemption that will apply to their estate.

Explore other estate planning documents.

Many people use additional documents to protect their assets when estate planning. Trusts are especially popular because they can avoid estate and gift taxes, allowing your beneficiaries to receive more of your assets.

If you want to create a comprehensive estate plan that protects your assets and minimizes the impact of estate taxes, you may want to speak to an attorney with experience advising people with larger estates. With the right legal strategy, you can protect your legacy.