Planning to avoid estate taxes

On Behalf of | Jan 8, 2020 | Estate Planning

Many of the strategies suggested by estate planning experts in Sarasota are specifically aimed at reducing the number of liabilities that might lessen the overall value of one’s estate. However, people might reasonably assume that no amount of planning will overcome the obligation to pay taxes on estate assets. Yet that is not the case. A few wise moves can help even those estates that may be subject to federal tax avoid legitimately avoid having to pay any.

The federal government has established an estate tax threshold that (according to information shared by is $11.58 million. This means that the first $11.58 million of one’s estate is exempt from taxation. As few estates have an overall value that actually exceeds that amount, few are ever taxed. One can preserve their entire estate tax exemption amount, however, in order to pass the benefit on to their surviving spouse.

This process is known as estate tax portability. The unlimited marital deduction allows people to give an unlimited amount to their spouses without it being taxed. This means that one can pas their entire estate to their spouse and still maintain their $11.58 million estate tax exemption. Their spouse can then combine that unused exemption amount with their own to protect up to $23.16 million from being taxed. All of that money is then free to settle an estate’s debts and pass on to beneficiaries.

It is important to note, however, that estate tax portability is not automatic. Per the Internal Revenue Service, a surviving spouse wishing to take advantage of it must file an estate tax return within the timely filing period of one’s death (which, in this context, is determined to be nine months).