Zanesville Attorneys Assist with Federal Estate Tax Planning


Letting your heirs keep more of what you give

The Ohio estate tax was repealed effective January 1, 2013, but many Ohioans must still contend with the federal estate tax. As of 2014, the estate tax rate is 40 percent on the wealth of an estate valued at more than $5.34 million. This may seem like a high threshold until you consider that your real estate holdings will be assessed at the current market value, not based on what you paid for them, and that an assessment will be made based on the value of your family business, not just the income you derive from it. Many of our estate planning clients are surprised to learn that they are vulnerable to federal estate tax and are grateful for our efforts to reduce their liability. The time to put federal estate tax protections in place is now, and the estate planning attorneys at Stubbins, Watson, Bryan & Witucky Co., L.P.A. are ready, willing and able to help.

Understanding the federal estate tax exclusion and exemptions

Your gross estate includes the sum of all cash and securities, real estate, insurance, trusts, annuities, business interests, and other assets. After a full accounting, you’re allowed certain deductions and reductions in value for certain holdings, such as farmland or family businesses, to arrive at your taxable estate. Available deductions include:

  • Mortgages, liens and other debts
  • Estate administration expenses
  • Property passing to a surviving spouse
  • Charitable donations

You must add the value of all taxable gifts made throughout your lifetime to the value of your taxable estate. If you’ve paid the gift tax on those items, that past tax is credited against the estate tax; if not, you may have to pay estate tax on those past gifts. This is a complicated accounting process, but it’s important to understand how the value of your estate could creep beyond the exclusion amount, subjecting your estate to federal tax and depriving your heirs of its full value.

Trust instruments for reducing federal estate tax exposure

For taxable estates that trigger the federal estate tax, our estate planning attorneys use various trust instruments to protect assets for the estate’s beneficiaries:

  • Bypass trust — A testator enters a bequest in a will, leaving any amount up to the level of the estate tax exemption to a trust that provides income to a spouse. The remainder of the estate passes tax-free to the testator’s spouse.
  • Qualified personal residence trust (QPRT) — When a testator establishes a trust that owns the family home, that property does not count as part of the estate, so its value does not trigger the estate tax.

Contact our Zanesville estate planning lawyers to learn about the federal estate tax

The federal estate tax can deprive your heirs of a great portion of your wealth. The estate planning attorneys at Stubbins, Watson, Bryan & Witucky Co., L.P.A. help Ohioans plan to reduce their exposure to federal estate tax. For attentive service from knowledgeable attorneys, call us at (740) 452-8484 or contact our Zanesville office online.