Many Florida residents who are planning for the distribution of their assets when then die may be concerned about future tax liabilities, but the federal estate tax exemption is actually fairly high. For those who still do not qualify for the exemption, there are other measures that can be taken to reduce or eliminate the tax.
The federal exemption for 2015 is $5,430,000. This number takes all assets into account including property and cash. While this exemption includes taxable gifts that an individual gives while alive along with the estate that is left to heirs after the individual’s death, there are ways around having gifts included in the total. Individuals can give away $14,000 per year and married couples $28,000 per year tax-free. Furthermore, as long as a spouse is an American citizen or agrees to a certain type of trust, an unlimited marital deduction may be available. This is not an ideal solution because the surviving spouse’s estate may still be subject to taxes when it is eventually distributed, but it can be a way of creating more time to deal with the issue.
Charitable gifts are also tax-free. With a combination of tax-free giving and charitable gifts, even wealthier individuals may be able to bring the value of their estate down to a level below the exemption.
However, this requires long-term planning. People may wish to obtain the advice of counsel while preparing their estate planning documents if they are concerned about taxes and similar issues. Wealthier individuals may still find tax-free giving and charitable gifts insufficient for their situation, but there may be a number of other solutions available for bypassing hefty estate taxes, and an attorney may be able to suggest strategies that will serve to preserve and protect the client’s property for future generations.