Quite often, it is seen that the outstanding estate tax goes to a huge amount, and the share of beneficiaries massively reduced after paying the taxes. To handle this efficiently, the easiest way is to hire a reliable Probate Lawyer Brooklyn. A professional has immense knowledge and experience on this, and you can relax after handing over all the tax-related responsibility to him/her. He/she will help in lawfully reducing the additional burden.
Here is a list to bring to your knowledge, how the Probate Lawyer Brooklyn can help you reduce estate taxes
Upon the death of a person, the lifetime gifts he/she has given to his spouse will not be counted for estate tax. Although, the spouse is liable to pay taxes for the entire estate, including what she/he has received from her/his spouse. Since this will be paid from her/his fund, the estate fund will not get affected.
Lifetime Gifts to Children
According to the Brooklyn intestacy law, each person can make a non-taxable annual gift of a maximum of $12,000. If both the spouses do such kinds of gifts each year, they will be able to save a good gift tax jointly. Over the years, this way, they can transfer their assets to the children and grandchildren and also save a large amount of tax.
This is truly an effective way to transfer your wealth to your beneficiaries and, at the same time, decrease the size of the taxable estate.
Probate Lawyer Brooklyn Advises to Go Through Family Limited Partnership
A family limited partnership is indeed a valuable tool of estate planning for the families to transfer the ownership of the businesses to the next generation. Besides, it also protects the assets from unwanted creditors. It permits the children to have a lower tax rate on income. In addition, it is also advantageous because of its flexibility and revocability.
Qualified Family-Owned Business Interest (QFOBI)
This is the interest that you need to deduct from a gross estate. You need to fulfill the following criteria to become eligible for the deduction.
- The owner must be a U.S. citizen.
- The business must be located in U.S. A
- The family member/s must own and run the business for at least five years.
- The business interest must be a minimum of 50 percent of the decedent’s gross estate.
- The decedent and his/her family must have at least 50 percent ownership in the business.
Probate Lawyer for Irrevocable Life Insurance Trusts
If a small amount of the estate is transferred to an irrevocable life insurance trust, you will be able to reduce the tax size even if he/she is in the process of growing his/her asset outside the estate at that moment. This is because the life insurance proceedings are not covered in estate tax.
Particular Use of Real Estate Valuation
During the value estimation of a real estate, usually, the highest possible value is considered. This often generates unfair results. That is why the Internal Revenue Code instructs to evaluate the actual cost instead of ‘highest and best use value.’ As a result, the estate tax reduces remarkably.
A.B. Trusts and QTIP Trusts
According to the probate law, each person can avoid estate tax for the first $2 million of his estate while passing to the successors. This is popular as personal exemption or unified credit. A trust, namely A.B. trust ensures the unified credit of each spouse to the full extent. This allows the surviving spouse to use the assets of the deceased spouse for the remaining lifetime.
A QTIP trust allows a spouse to transfer the assets to his/her trust while having control over those assets at a spouse’s demise. This trust is extremely useful for a person who has married for the second time and has children from the first marriage for whom he/she wants to reserve a part of his assets. Consult with a probate lawyer Brooklyn to utilize this trust for yourself in a simplified manner.
Probate Lawyer for Private Annuity
A private annuity, in its simplest form, is the sale of an asset to the next generation. But this happens in exchange for a promise to pay an amount annually to the seller for the rest of his lifetime. However, there is no basis of the assurance that you will receive the amount as the purchaser has promised.
However, the amount of the asset is eliminated from the estate after it is sold, and hence the tax on that amount becomes NIL.
An experienced probate attorney will guide you with the particular method applicable to you.