Tampa Tax Planning Attorney

Gift and estate taxes can take a significant portion of your estate, leaving less for your beneficiaries and heirs. If you have significant assets, our Tampa tax planning attorney can help you minimize, and perhaps even eliminate, the federal taxes applied to your estate, which can allow your heirs to inherit the maximum amount of tax-free property possible.

Gifting to Reduce the Taxable Estate

The federal government allows you to make gifts from your estate, which can reduce the size of the taxable portion of your estate. Gifting property can also provide financial assistance to your loved ones, while also giving you the pleasure of seeing family members use their inheritance since you give these gifts during your lifetime.

As of 2024, individuals can gift up to $18,000 to as many beneficiaries as they would like without incurring a gift tax. Married couples can gift twice this much, making the threshold $36,000 in 2024. These amounts change every year, so it is important to speak to a Tampa tax planning attorney who is current with the law. It is possible to gift more than the threshold if the gift is made directly to an educational institution or medical provider. This can also relieve the burden of tuition and health care expenses for beneficiaries while avoiding the gift tax.

You can make gifts to any individual, as the law does not only apply to family members.

Life Insurance Trusts

If you have an estate with substantial assets, it may be subject to high estate taxes. Without proper planning, it is difficult for family members to determine which assets should be used to pay these taxes. For example, if you have a business, selling it to pay estate taxes can be very damaging, as family members may still rely on the income it generates.

Irrevocable life insurance trusts are a solution to this problem. You can insure yourself, or coverage can continue until the death of the second spouse in a marriage. This is typically what triggers the federal estate tax.

A life insurance trust will name a trustee, who is not the same person as the insured. Trustees are usually an adult child or a third party such as an attorney or a financial institution. When executed properly, the insured then makes gifts to the trustee, with the intention that they will ultimately benefit the beneficiaries, who are typically children and grandchildren. These gifts are then used to purchase and cover the cost of life insurance for the insured. After the insured individual passes away, the life insurance benefits are then paid to the trustee, who distributes them to the beneficiaries.

Our Tax Planning Attorney in Tampa Can Advise You of Your Options

The above are just two options that can protect your estate from taxation. At BBDG Law, our Tampa tax planning attorney can outline all of your options and the advantages and drawbacks of them so you can make the choice that is right for you. Call us today at (813) 221-3759 or fill out our online form to schedule a consultation and to learn more.