How to Avoid Estate Tax
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by: ryshep13@gmail.com
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Inheritance taxes and death taxes are basically the same thing as estate taxes. They are a tax imposed by the government, and generally speaking, they have nothing to do with probate. Most families don't have to worry about estate taxe, because the federal government doesn't impose payment of the tax on "smaller estates." Even larger estates usually don't have to pay estate taxes, because there are a number of legal tools that can help eliminate any estate taxes actually payable.Estate taxes are often called the voluntary tax, because if you plan for them you don't have to pay them. The rich don't lose all their money when a family member dies. Why should you lose a dime?nAn estate tax is actually imposed on every dime of a dead person's estate.Even though a tax is imposed, most people don't actually pay any tax, because everybody is given a credit to offset a specific amount of the estate tax imposed. The exact amount of property an individual can pass without paying an estate tax changes quite frequently. It is actually the credit amount that changes and not the estate tax rates and brackets.nnThe IRS has brought the estate tax and gift tax together and "unified" them. The credit we have been talking about is called the "unified credit," because it can be used to offset either a gift tax or an estate tax liability.The unified credit can be used to "pay" either the gift tax or the estate tax, or a combination of both the gift tax and the estate tax.Because congress changes the unified credit amount frequently, when you want to know what the unified credit amount actually is, you will have to look it up.Whatever the unified credit is, the amount of property that generates a gift tax or estate tax exactly equal to the unified credit amount is known as the "exemption equivalent.So when somebody says you can pass $2 million without an estate tax, they are really saying that the unified credit amount allowed that year will offset the tax on the individual's first $2 million of property subject to a gift tax or an estate tax.nA family's estate is bigger than they may think. The estate includes, the house, dog, cat, kids, car, stocks, bonds, the retirement accounts, all the other real estate, the little business, all of the life insurance at its face value, and every other asset that you can think of.In almost all estates, life insurance is included in the estate evaluation, and it is subject to the estate tax.Inflation allows estate values to gradually increase, and many families are shocked when they actually end up paying estate taxes after dad dies.The estate tax rate on the first dollar, where there is actually an estate tax payable, is close to 50%. If the estate is only a half a million dollars over the exemption equivalent, there will be a payable estate tax of about $250,000.Attorneys aren't cheap, but getting an extra $250,000 to your family makes their motley $10,000 bill look like a great deal.nLee R. Phillips's FREE DVD, Using the Law to Make Money and Protect Your Assets, coupled with his new book, Guaranteed Millionaire, shows you how to remove life insurance from the estate tax problem. The book and DVD also show a couple how to double the amount of unified credit they have available, if they use a revocable living trust.There are a number of legal options available, if you don't eliminate your estate taxes by getting the life insurance out of your estate and getting twice the normal amount of property down to your family without an estate tax.Some of the other options you have are Family Limited Partnerships, Corporations, and LLCs. These and other tools are exposed in detail in the FREE DVD and book. They let you eliminate estate taxes and get a ton of asset protection.Order Guaranteed Millionaire and the FREE DVD, Using the Law to Make Money and Protect Your Assets, now.
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For more information on how to avoid estate tax please visit our website above and get a free 90 minute informational DVD.n
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