Now that we have made our way into 2015, estate planners around the United States can celebrate the ever-growing size of their federal estate tax exemptions. As of 2015, the estates of those who die with estates under $5.43 million in value will not be subject to federal estate tax. There is even more to celebrate: many states are coming on board with higher estate tax exemptions as well. Both eventualities impact estate tax planning in Texas.
The more friendly estate tax exemptions are the result of the American Taxpayer Relief Act. The measure became law in 2013 and included the measures that raised federal estate tax exemptions to the $5.43 million figure. Now, only a small percentage of estates will be affected by estate taxes. Currently, only 15 states, along with Washington, D.C., have estate taxes and only six have inheritance taxes -- which could affect an estate in addition to the federal taxes. Fortunately for Texas residents, our state is not one of them.
That said, if a Texas resident's estate exceeds $5.43 million, he she may want to consider various estate planning measures to limit federal tax liabilities. Most of these legal techniques involve the strategic use of a trust account. A trust account is an excellent way for wealthy individuals to transfer their wealth to loved ones, charities and other beneficiaries without the estate being subjected to federal estate taxes.
Ultimately, no estate plan is the same, and each needs to be crafted in a way that suits one's unique circumstances and needs. Whether a Texas resident requires estate tax planning strategies, long-term care planning strategies or has some other kind of need, an estate planning attorney will be able to service those needs. Ultimately, estate planning is done for loved ones and beneficiaries -- both to help them inherit as much as possible and to ensure that the wishes of the individual devising his or her estate plan are carried out appropriately when the time comes to do so.
Source: investors.com, "Estate Planning For 2015: How To Protect Assets From Taxes", Margaret Price, Jan. 2, 2015