Minimizing Estate Tax Liability
The estate planning lawyers of northern Virginia’s Hale Ball Carlson Baumgartner Murphy, PLC provide innovative ways for testators and personal representatives (executors) to reduce estate tax liability. Regardless of whether you are planning for your own estate and are looking for ways to transfer as much of your wealth to your loved ones as possible or you are an executor who is seeking to minimize the tax impact on the estate you are administering, the professional estate planning and probate attorneys of Hale Ball Carlson Baumgartner Murphy, PLC can assist you in minimizing the portion of the assets that the government can tax. Contact our Northern Virginia office to discuss a tax-minimizing plan for your estate.
Estate Tax Liability Minimization in North Virginia
For most estates, the tax exclusion of $11.58 million for 2020 (and indexed to be inflation-adjusted in future years) is sufficient to avoid the federal estate tax. Larger estates, however, face a current tax rate of 40% for any amount exceeding the exclusion. And if the current law is allowed to sunset, in 2026 the estate tax exemption amount chops to $5.49 million.
One of the most common ways to reduce the estate tax impact is to avoid it altogether. That’s why after a careful review of our clients’ goals, our estate planning lawyers for large estates will sometimes recommend transferring some of the assets into an irrevocable trust. With this type of trust, the grantor transfers ownership of the assets into a trust and cedes control over them to a third party. Because the individual making the trust no longer owns the assets if planned for properly, they are not counted as part of the estate at the time of death.
Another option is a gifting program during one’s life, taking advantage of the $15,000 annual gift tax exclusion amount. Or gifting large amounts now while the exemption amount is high. The IRS has indicated they will “grandfather” these gifts even if the exemption amount chops.
Another tax-minimizing strategy involves the valuation of fluctuating assets. The IRS allows executors to choose an alternate date within six months from the time of death for the purpose of asset valuation. What this does is allow for the selection of a date where assets were at a low point for the purpose of valuation. This can be tremendously useful when valuing stocks, bonds, or real estate if the market is in a state of decline.
Professional Estate Planning Lawyers for Virginia, Maryland, and the District of Columbia
The Attorneys of Hale Ball Carlson Baumgartner Murphy, PLC use these and other inventive ways to reduce the impact of federal estate taxation for our clients. With over forty years of estate planning and probate law experience, the lawyers at Hale Carlson Baumgartner, PLC have established reputations as some of the Commonwealth of Virginia’s foremost estate planners. To schedule an appointment at our Fairfax office, call 1-703-591-4900.
Since 1980 the AV-rated law firm of Hale Ball has served the legal needs of individuals and businesses. Our team of attorneys include lawyers named to Super Lawyer and Rising Star lists, as well as attorneys with advanced legal degrees, specialty certifications and lawyers who teach their areas of practice to other lawyers.
Use the contact form on this page to schedule a consultation, or call 703-591-4900.
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10511 Judicial Dr
Fairfax, VA 22030