The process of settling an estate can be difficult and emotionally painful for the family and loved ones of the deceased. Our estate planning attorneys at the Andersen Firm ensure that the process will be handled with compassion,
expedience, professionalism and expertise, while protecting the rights of all parties
Working closely with our skilled attorneys, each of our clients is given a complete
overview of their loved one’s estate, the taxes and debts that may be incurred and
any portions of the estate that would require probate. Our expertise comes in by having
the most up to date information of estate and tax laws, and in working closely with
the executor and heirs.
Uncle Sam’s 6 Options for Paying the Estate Tax
- Pay the Tax
This is the option that Uncle Sam wants you to choose and is the default option if you don't choose any of the other 5 options. Upon the second spouses death any amount over and above the federal exemption amount will be taxed at the federal tax rate. This also is true for any amount over and above the state exemption amounts depending on the state you are a resident of.
- Spend it All
Spending down the estate by taking long vacations buying more expensive cars, eating out at fancy restaurants is a way to avoid estate taxes. However, this option does not appeal to most people who have worked their entire lives to obtain the wealth they have.
- Gift it to Charity
Gifting any amounts over the current exemption amount to a charity(ies) will negate any federal estate tax. For most of us charity starts at home and we would rather see those monies go to our children and beneficiaries.
- Gift it to Beneficiaries
A gifting program properly implemented and adhered to is a great way to pass wealth down to beneficiaries and out of the estate. However, the gifting program must have enough time to make an impact and will not be effective if it is started late in life.
- Advance Planning Techniques
There are over 60 different estate planning techniques that can zero out estate taxes no matter how large the estate. These techniques, while effective, will add a level of complexity that many people simply do not want to deal with.
- Irrevocable Life Insurance Trust
The irrevocable life insurance trust or ILIT is a special type of trust, that holds and is the beneficiary of, a special type of insurance. This insurance inside this trust is guaranteed level premium, guaranteed benefit and can be placed on the life of one spouse or both spouses. The payout from the policy is not estate taxable and is specifically earmarked to pay the estate taxes. This option is the simplest and cleanest way to deal with the estate tax.