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Nici Law Firm, P.L. Protecting Your Assets for Generations to Come
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Naples Estate & Gift Tax Planning Lawyer

The federal Estate Tax can certainly exact a toll on an estate, with tax rates as high as 40%. If you have a very large estate, you want to plan to avoid the Estate Tax as much as possible. Even if your estate is somewhat smaller, you still don’t want to bump up against the Estate Tax and lose a significant chunk of your estate’s value. Additionally, relocating to Florida from a state with its own Estate Tax or an Inheritance Tax requires special attention and planning. At Nici Law Firm, P.L., you’ll find a Florida Board-Certified Specialist in Wills, Trusts and Estates with an advanced Master of Laws degree in Taxation. Call Naples estate & gift tax planning lawyer Nici Law Firm, P.L., to discuss your best options for integrating Estate and Gift Tax Planning with your overall Estate Planning.

What is the Estate Tax?

The federal government imposes a tax on estates when the owner dies, and it also imposes a Gift Tax for annual gifts over a certain amount made by the owner of an estate. However, both the Estate and Gift Tax are subject to a combined or unified lifetime exemption, and only value over that exemption amount is taxed. For this reason, the Estate and Gift Taxes are commonly discussed together as one tax.

For 2020, the lifetime exclusion amount from the Estate and Gift Tax is $11,580,000 (annually adjusted for inflation). If you are married, you can double the amount of this exclusion, assuming you plan appropriately with the estate tax in mind. The Estate Tax is, therefore, only a concern for individuals or couples with fairly large estates. However, it’s important to know that in 2026, the exclusion amount drops to $5,490,000, a reduction of more than half what it currently is. This decrease will obviously sweep many more people into the path of the Estate Tax. When you are planning now, hopefully you are planning for more than six years into the future, so considering the Estate Tax in your Estate Planning is not just an academic exercise. It’s important.

How does one avoid the Estate Tax?

In addition to the marital deduction, charitable deductions don’t involve the Estate Tax, and neither do the expenses of Estate Administration. In addition, an experienced Estate Planning Specialist has several tools available to help your estate avoid the Estate Tax. These tools include many different types of Trusts, including Credit Shelter Trusts, Irrevocable Life Insurance Trusts, Charitable Trusts, and more. In Naples and surrounding areas, call Nici Law Firm, P.L., at 239-44-6150, or contact us online, for more information.

What about the Gift Tax?

The Gift Tax comes with an annual exclusion of $15,000 per person. This amount is doubled if you are married. Therefore, planning to avoid the Gift Tax means, in essence, not making gifts of more than $15,000 (or $30,000) to a single person in a single year. There are other ways gifts may not implicate the Gift Tax, as well. For instance, charitable and interspousal gifts are not taxable, regardless of their size. Also, you can pay for a person’s tuition or medical bills without implicating the Gift Tax, provided your payments go directly to the institution or healthcare provider. This method can be an important part of Estate Planning for a child or grandchild with special needs, among others.

Other Estate and Gift Tax concerns

If you are relocating to Florida from another state and still have property located in that state, your Estate Planning attorney may want to pay special attention and address unique concerns. Some states have their own Estate Tax, which taxes smaller estates than the federal tax. New York, for example, has an exclusion that is currently about half the federal exclusion, subjecting much smaller estates to the New York tax. New York estates are taxed at a lower rate than the federal rate, but they still can be taxed at rates as high as 16%. Also, once your estate goes over the cliff and is taxable, New York taxes the entire estate at the applicable rate, and not just the amount over the exclusion amount.

Other states, such as New Jersey and Pennsylvania, have an Inheritance Tax that taxes heirs and beneficiaries on the amounts they receive, rather than taxing the estate itself (which lowers the amount heirs and beneficiaries receive). When relocating to Florida, talk to Naples Estate Planning attorney James R. Nici about setting up your Florida domicile and planning appropriately.

Our Board-Certified Lawyer is Ready to Help You with Naples Estate & Gift Tax Planning

For smart, strategic, help with Naples Estate & Gift Tax Planning and other Estate Planning in Marco Island, Bonita Springs and Estero, contact Nici Law Firm, P.L., at 239-449-6150 or contact us online for a complimentary consultation, and discuss your needs with a Florida Board-Certified Estate Planning Specialist in Wills, Trusts and Estates.

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