Tag: estate-taxes
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What is a Permanent Life Coverage Trust and how does it operate?
There is a common misconception that life insurance profits are not subject to estate tax. While the profits are obtained by your loved ones without any income taxes, they are included as part of your taxable estate and as a result your loved ones may forfeit more than forty percent of its worth to federal…
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What is the unlimited marital deduction?
The federal government allows every married individual to give an unlimited amount of assets either by gift or bequest, to his or her spouse without the imposition of any federal gift or estate taxes. In effect, the unlimited marital deduction allows married couples to delay the payment of estate taxes at the passing of the…
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How can I leave my estate to my partner without incurring any taxes?
If your partner is a US citizen, you can leave your entire estate to your partner and estate taxes would be deferred until the death of the surviving partner. If you don’t want to leave the entire estate outright to your partner, you can set up a trust through your will or living trust and…
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What is a life insurance trust?
A life insurance trust is a type of irrevocable trust created by John Smith and intended to own a life insurance policy on his life. The advantage of the life insurance trust is that the life insurance policy will not be considered part of John Smith’s estate, and the proceeds from the policy can be…
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What is the definition of the Unlimited Spousal Deduction?
The US government has granted an exemption for all transfers of assets between married partners, in addition to the $5,490,000.00 exemption for federal estate taxes. This exemption, known as the Unlimited Spousal Deduction, implies that, regardless of the size of the estate, no taxes are due when the first spouse passes away. However, it is…
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What does the process of estate planning entail?
What does a comprehensive estate plan entail? Estate planning involves the development of a comprehensive strategy and the creation of legal documents to safeguard, preserve, and distribute assets before and after death, benefiting loved ones and charitable organizations. This process considers the impact of state and federal tax laws, as well as administrative regulations. Additionally,…
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What is estate preservation?
In our jurisdiction, there are no estate taxes. However, if your estate is liable to federal estate tax, it is advisable to consult a legal professional in order to strategize effectively and ensure maximum preservation of your estate’s value.
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What is the purpose of an Asset Protection Trust?
A document that is created by the legal entity or grantor to indicate how to transfer ownership of specific assets and who to designate as a trustee to oversee those assets for the advantage of the beneficiaries. Asset Protection Trusts provide protection for your assets against creditors of yours or your beneficiaries. These trusts are…
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What does property tax pro-ration entail?
Property tax pro-ration refers to the practice of assigning responsibility to either the purchaser or seller for their portion of the real estate taxes payable on the property during their respective periods of ownership. The taxes are prorated either retroactively or proactively up to the property tax deadline.
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What are the estate tax rules in Florida?
There is no estate tax or inheritance tax in Florida. However, residents of Florida may still be subject to Federal Estate Taxes.
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How does the Grantor Retained Annuity Trust (GRAT) function?
Can you provide an example of a GRAT? A Grantor Retained Annuity Trust, or “GRAT”, is an “estate freeze approach” that allows a Donor to give away the appreciation of an asset gift tax free. The Donor transfers high income-producing assets or assets with substantial growth potential (or cash to be invested in such assets)…