How a Trust Could Help You Avoid Paying Inheritance Taxes

Estate planning can be uncomfortable. Nobody wants to contemplate their own demise. At the same time, you want your loved ones to be provided for after you die and for your estate to be properly distributed when you’re not there to oversee the distribution. And, having worked very hard to reach this point, you don’t want your estate to be frittered away by taxes and fees.

The solution may be a trust. Contact the estate planning lawyers at Staubus, Blankenship, Legere and Walker PLLC to learn how.

Irrevocable Trusts and Inheritance Tax

Of course, you will not be paying any inheritance or estate taxes. That duty will fall to your heirs and beneficiaries. The purpose of estate planning is to minimize the amount of taxes that need to be paid out from your estate. Your estate planner will explain how your estate is valued in more detail, but there are some things you need to know going into a planning session.

• Inheritance tax. This is a tax heirs must pay for the income they receive from the deceased. The state of Texas abolished inheritance tax in 2015. The inheritance tax is levied against the beneficiaries on the value of the portion of the estate they receive once they inherit.
• Estate tax. Texas has no estate tax. The federal government taxes large estates valued at $11.7 million or higher. The value of the estate is determined prior to the beneficiaries taking their share; in other words, before it has been divided.
• Revocable trust. These trusts allow you, the grantor, to move property in and out of the trust at will during your lifetime. Property in a revocable trust will be valued as part of the estate when it is reassessed following your death.
• Irrevocable trust. When property is placed in an irrevocable trust, it cannot be removed until after you die. This means that when your estate is valued, anything in an irrevocable trust will not be included by the IRS.
• Pour-over will. This type of will automatically transfers all of your current assets into your trust when you die, without the need for further action by your executor.

Estate planning to ensure that your heirs and beneficiaries can keep the largest portion of their inheritance can be a complex affair. Making things more complicated is the changing estate tax exemption. To keep pace with inflation and cost of living, the IRS adjusts the estate tax exemption annually according to a preset cap. This will change again in 2025.

If this sounds complicated, it is. Get in touch with us today and let us help you simplify the process.

Out of State Considerations

In our global community, it is not uncommon for people to have property, both tangible and intangible, in other states, possibly even other countries. Even with a properly managed trust, this other property may be subject to the estate and inheritance tax laws of that state. For instance, although Texas does not have an inheritance tax, Maryland does. Any property owned and transferred in Maryland will be governed by Maryland’s tax laws.

Your Dallas estate planning attorney can guide you through these complex regulations and make sure your wishes are properly stated in your trust. If there are conflicting laws in other states, it is better to discover them ahead of time than to have your heirs find out about them later.

How We Can Help

Anyone with an estate below $75,000 in Texas does not even need to leave a will. Their estate can be managed by the heirs with a simple acknowledgment to the court. If you have real property and large amounts of money and personal property that you want your loved ones to be able to keep after you are gone, you should have solid legal advice and estate planning, rather than trusting to the whims of fate.

The expert legal team at Staubus, Blankenship, Legere and Walker PLLC focuses exclusively on the details of estate planning and litigation. We want to be sure that people with even modest estates avoid costly legal battles and endless probate, and hand their property over to their heirs with a minimum of effort.

Our Dallas estate planning lawyers will review your assets and advise you about the best ways to protect them and your heirs and beneficiaries, including revocable and irrevocable trusts, living trusts, and pour-over wills. We will make certain that your final documents accurately reflect your wishes and desires in clear and concise terms.

We have been practicing estate and probate law in the Dallas area for many years. Contact the of Staubus, Blankenship, Legere and Walker PLLC at (214) 833-0100 if you want to draft your will, need help with your estate planning, or have any other questions about property disposition. If you already have these documents and want help with amendments or codicils, we can work with you on those too.

Call us for a confidential consultation today.