You have worked hard for the better part of your life to accumulate a fair amount of assets that you intend to pass down to your heirs. One thing that is important to consider are estate and inheritance taxes. Currently, federal estate tax is applied if a person’s combined gross assets and previous gifts that are taxable are more than $11.7 million per person and $23.4 million for couples. Some states also have estate taxes, and some of the states have a lower tax threshold than the federal numbers.
Kentucky has no estate tax, but is one of several states that has an inheritance tax. The difference is that an inheritance tax is the responsibility of the beneficiary who inherits the estate. Interestingly, some inheritances are taxed and some are not. It depends on the relationship that the heir has with the person who is leaving the inheritance and the exact nature of that inheritance.
How do you minimize estate and inheritance taxes?
The amount of estate tax or inheritance tax that you have to pay depends greatly on where you live. Some experts recommend that people who are inheriting move to a state where there are no inheritance taxes. Some people also minimize their estate taxes by giving away assets before they die. Trusts and other estate planning tools can also minimize the damage taxes can inflict on estates and inheritances.
The expert advice of an elder law expert
If you are in situation where you are older and are planning your estate, the solid advice of an elder care lawyer may make a tremendous difference to the outcome of your plan. The lawyer can help you to create a strong power of attorney that will allow you to create a will that is exactly what you want, and set up a trust if you feel that it is needed. The main thing is that you protect your assets so that you can maximize the legacy you leave to your loved ones.