How Can Your Tax Planning Be Affected By Your Estate Planning, And Vice Versa?


Most clients today know how important creating a Florida estate plan is for themselves and their families. They want to protect themselves, those they love most, and their businesses.  To ensure the legacy they are creating will survive them, many choose an estate planning attorney near me who is board-certified, possesses a JD and an MBA. He deeply understands the importance of these goals and work with them to create plans that align with their unique situation.

Part of the planning process is to not only look at who they want to benefit someday and who should make their decisions in a moment of crisis but also what implications their planning may have. This involves a very candid look at their financial picture, including their tax structure.

Chances are you have heard the phrase “there is nothing certain in life but death and taxes.” It is one of the idioms heard time and time again. What most people don’t realize, though, is that taxes play an important role in their Florida estate plan. The decisions they make now can have both a lifetime and deathtime impact on their estate, which is critical to plan for.  Here are a few of the key insights:

  1. Planning to avoid federal estate taxation. As you know, one of the benefits of living in Florida is that no state death tax exists. This is not the case on the federal level. All Americans, with a taxable estate high enough in value, may face estate taxation. Our goal, through your comprehensive Florida estate planning, is to minimize the risk that your estate will be taxed at your death. This is completed by a careful consideration of factors including, but not limited to, your family structure, what assets comprise your taxable estate, the structure and nature of those assets, and the strategies available to you.
  2. Carefully making lifetime gifts. Your estate planning and donative intent can impact your annual taxes as well. This occurs through the gift tax. While you can give your loved ones the annual exclusion amount each year, which is $17,000 per person this year according to the IRS, you can make larger gifts each year and still avoid lifetime taxation. To engage in an advanced strategy like this, you need to meet with your experienced Florida estate planning attorney to learn more about the pros and cons of this type of strategy as well as how it may benefit your estate down the line.
  3. Utilizing an estate planning strategy that incorporates the Generation Skipping Tax (GST). There are careful rules to plan around when it comes to using the GST as a part of your estate planning. This can come into play when you devise or bequeath assets to a family member more than one generation below you or to a non-relative in cases where there is a thirty-seven and a half year age difference or more. While there can be significant benefits to this type of planning and reasons to complete it, this should not be undertaken without the advice of an experienced Florida estate planning attorney.
  4. Unprotected property and the probate estate. It is vital that you plan to not leave your assets unprotected. Anything you own at the time of your death that does not have a co-owner or beneficiary (and is not owned in a trust) could be subject to the probate process. This is the legal court process that allows sole owner property to pass to the intended beneficiaries. Unfortunately, as part of the probate process, creditors have the opportunity to file claims against the estate. A valid claimant will have their claim paid out before any beneficiary inherits assets from the estate. When you are planning for your estate and your taxes, it is critical to work with your estate planning attorney to create the right trust agreement for you. It is a trust agreement, and not a last will and testament, that can help you avoid the probate process.

We know this article raises more questions than it answers. The Law Offices of John Mangan, PA, an estate planning attorney near me takes a very different approach from what you might have come to expect. Their goal is to create lifelong relationships with each client, to guide and manage your legacy for the rest of your life. Please contact their offices in Stuart and in Palm City to learn more.  Call:  1 (772) 266-5108

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