Trusts & Estate Taxation

Trusts & Estate Taxation

When planning for where your estate will go after you pass on, there are many factors to take into account. Among those weighty matters are the tax implications of your estate plan. A sound plan will not only protect your assets and safeguard your legacy from civil parties, but it should also minimize the amount that the government reaps from your wealth.

Hart David Carson provides legal advice backed by decades of estate planning expertise to Illinois residents. We can help you take the tax implications of your estate and trust planning into consideration and advise you on the best course to take.

Avoiding Estate Taxes

Estate taxes can be massive (nearly half the worth of your estate), so mitigating those is key to passing on your legacy to your family and others. This is particularly important if you have a particularly large amount of wealth to pass on. For those with smaller estates, this isn’t as much of an issue since both the federal government and the state have set exemption limits for both:

  • In 2010, the federal government set the exemption limit at $5 million. That amount is adjusted each year for inflation.
  • The Illinois estate tax exemption is set at $4 million.

If your estate’s net worth falls under those amounts, then you have nothing to worry about as far as estate taxes are concerned. For those with estates valued above the exemption limits, the federal taxes are 40% of any amount above the limit, and the state taxes are 28.5%.

Avoiding those taxes will require minimizing the value of the estate, either by giving gifts, donating to charities, or utilizing a trust. These may have their own tax implications, however, so it’s vital to counsel with a tax attorney while putting together your estate plan. We can provide you with the legal counsel and advice you need when planning for your estate.

Additional Taxes

While most people will avoid estate taxes, there are other taxes to be concerned about as well. For instance, for beneficiaries living in certain states, an inheritance tax will be imposed on the amounts they receive. Cash received through trusts may also be taxed, so it’s important to structure those in a way that minimizes the burdens on your beneficiaries. We have helped our clients structure various forms of trusts, including the following:

  • Charitable trusts
  • Revocable and irrevocable trusts
  • Dynasty and generation skipping trusts
  • Medicaid / Medicare trusts
  • Real estate trusts

Additionally, gifts above a certain amount may be taxed heavily by the government, but only under certain circumstances. There are ways to handle this without incurring any gift taxes on yourself, but only if it’s done within certain limits.

Our experience in estate planning and asset protection matters allows us to provide you with the legal guidance you need when it comes to reducing taxes.

Tax and Estate Planning

Hart David Carson has helped a wide range of clients minimize estate taxes and pass on the maximum amount of their wealth to loved ones, charitable causes, and other parties as they desire. 

For a free consultation or to learn more, contact our attorneys today.

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