What the IRS Says about Estate Taxes | Grand Rapids and Muskegon Estate Tax Lawyer
Estate tax lawyers in Grand Rapids and Muskegon spend a lot of time learning and relearning tax law, as provisions change continually. In addition to knowing about the various types of state taxes that could affect an estate, it’s also necessary to keep up to date on what the federal Internal Revenue Service has to say about these things.
When a US citizen passes away, he or she has the right to transfer property to others. Before this can happen fully, however, the federal government wants to see a full accounting of what was owned. This means that someone, often with the assistance of a qualified estate tax lawyer, will have to ascertain the current fair market value of the deceased assets. These assets might include cast, securities, trusts, annuities, insurance, business interests, real estate, and more. When all of the assets’ values are added up, the total is the “Gross Estate.”
Fortunately, the entire estate may not be taxable. An estate tax lawyer in Muskegon will be able to assist the executor of the estate in determining if there are applicable deductions that should be considered before coming up with a final number known as the “Taxable Estate.” For example, some charitable donations, property being left to spouses, certain debts, and even the costs of administering the estate may all be deducted before determining how much is actually taxable.
But, that still isn’t the final number. There may be some “lifetime taxable gifts” that also need to be included and then reduced again by what is called the “unified credit.” Obviously, this area of law is pretty complicated, which is why individuals are strongly encouraged to consult with a Grand Rapids and Muskegon estate tax attorney, not only during the distribution of the assets—but more importantly, when the estate plan itself is being drawn up. Estate tax lawyers have considerable insight into how to create a plan that legally minimizes the amount of taxes that will eventually be paid.
Smaller estates don’t have to file an estate tax return with the IRS, but larger ones do. The threshold at which this is required changes annually. In 2014, an estate tax return needs to be filed on those with a combined gross asset and prior taxable gift total of $5,340.000 or more.
For those doing their estate planning now, it is absolutely in their best interest to talk with a lawyer who is well-versed in estate tax law. This person can advise you on how to make appropriate gifts during your lifetime that will lower the gross estate later. Additionally, it may be beneficial for an individual to consider putting funds into certain types of trusts in order to avoid having them heavily taxed. This is one of those areas where paying a little up front (in the form of estate tax lawyer costs and some filing fees) can pay off hugely later for the beneficiaries of your estate.
If you would like to speak with a professional Grand Rapids and Muskegon estate planning lawyer, please contact Eyestone Law Offices at 800.667.5291 to schedule a free initial consultation today! We have three offices conveniently located in Grandville, Muskegon, and in Grand Rapids near Woodland Mall and provide services throughout West Michigan.