As a savvy Florida resident, you know that Congress passed and President Trump signed into law the Tax Cuts and Jobs Act in late December. What you may not have asked yourself, however, is whether or not this new law affects your estate plan.
If you are among the many Florida residents working on your estate plan, you would be wise to consider whether you will have to pay estate tax. If so, it may prove beneficial for you to think about how you might be able to minimize the amount owed. At the Law Offices of Frye & Vazquez, P.L., we have helped many residents work through these and other estate-planning issues, aiding Floridians as they plan for the future while helping them retain more of their own wealth.
If there is a common concern that the many clients that we here at The Law Offices of Frye & Vazquez, P.L. have helped to prepare estate tax returns in Miami share, it is the fear of being audited. You know how stressful if can be to prepare your own individual income tax returns every year. Imagine the added pressure that can come with the Internal Revenue Service asking you to justify what you file. Your annual income may not approach the minimum estate tax return filing threshold ($5.49 million for 2017), so your concerns over having to provide a detailed account of all of those assets is certainly justified.
Every spring (or perhaps more often, depending on your employment in Miami) you go through the annual ritual of paying your taxes. Given all of the confusion that is often involved in paying your own taxes, imagine how much more there may be if you have to file a return for the estate of a deceased loved one. The stress associated with it may make you want to forget about the task altogether. Yet what happens if you do?
Your entrepreneurial pursuits in Miami have hopefully yielded a significant windfall for you and your family, and provided people in the local community with jobs. Yet what happens to your business after you are gone? If you have earned significant personal assets, your estate could be subject to the federal estate tax. Many small business owners in your same position come to us here at The Law Offices of Frye and Vazquez, P.L. concerned that their having to pay the estate tax will force the sale of their companies. Should you be sharing this same concern?
If you have been named as the executor of the estate of a friend or family member in Miami, then one of the first things that you should consider are the tax considerations of the assets you are now in charge of. This requires becoming familiar with the IRS Form 706. What is this form? It is the one used to submit an estate tax return. Copies of this form can be downloaded directly from the Internal Revenue Service’s website. Make sure, however, that you are using the current year’s form, as these documents are often updated annually.
Many people often come to us here at The Law Offices of Frye and Vazquez, P.L. concerned that much of what they have to leave to their spouses, children, and/or grandchildren will be taken through estate taxes. If you share this same concern, you should know one thing: most estates in the U.S. will not be subject to an estate tax. That is because their total values do not exceed the estate tax threshold set by the federal government. Whether or not yours will depends on the value of your taxable estate.
As the executor for the estate of a family member or friend in Miami, the one area that may cause you the most trepidation is dealing with the having to pay estate taxes. Those who come to us here at The Law Offices of Frye and Vazquez, P.L. with their tax questions typically want to know two things: First, if their loved one’s estate is even required to pay taxes. If it is, then they typically want to know how long they have to pay them. If a looming estate tax return filing deadline is approaching, you may want to consider asking for an extension in order to have the time needed to collect information to do an accurate tax assessment.
Many in Miami may be counseled on the wisdom of taking out a life insurance policy to help ease the financial burden their loved ones may feel when they die. One of the more attractive aspects of a life insurance policy are the perceived tax advantages it offers, specifically that beneficiaries do not have pay income tax in its proceeds. Yet while that is true, many do not consider that a life insurance payout may suddenly force their loved ones to become subject to estate taxes.
As you become involved in estate planning in Miami, you may begin to see more and more references being made to estate taxes. Most often, this is in reference to the federal estate tax, which you only pay if the taxable value of your estate exceeds the federal threshold (currently $5.49 million per Forbes Magazine). Yet were you aware that individual states can also levy their own estate tax?