What Should You Know About Estate Taxes?
If you are a professional, a business owner or another type of high net worth individual, you may have concerns about estate taxes. Advanced estate planning can address many of these issues, but it requires an attorney with a firm grasp of both tax and estate laws.
I am John M. Discenza, an estate planning attorney in the Boston area. I assist clients at my firm, J.M. Discenza Law, LLC, with estate planning, tax planning and the administration of probates and trusts. In addition to my 40 years of experience, I also have a Master of Law degree in estate planning and estate taxation.
Understanding Estate Taxes
Both the federal government and the Commonwealth of Massachusetts have an estate tax, though they are not the same. The threshold for the state is much lower than that for the federal government. The government views the value of your entire estate, both probate and non-probate, to assess your tax burden.
Some people confuse the concepts of probate and taxes. They think they can avoid paying estate taxes simply by avoiding probate. This is not quite how it works, though the idea probably stems from the fact that many estate tax planning tools involve trusts, such as Crummey trusts and charitable remainder trusts. Your planning options are often quite specific to your individual situation. I will take the time to review the pros and cons of every option with you so you can make an informed decision.
Medium- and high-asset individuals and couples will often employ gifting strategies in their tax and estate plans. The federal government allows people a certain total amount they can gift tax-free over their lifetimes and each year. I will work with you to determine how lifetime gifting can work to your advantage as part of your overall estate and tax plan.