Estate Tax Planning

You want the property and assets that you have worked a lifetime to amass to go to your loved ones and the organizations that you value. Our goal as estate planning attorneys is to help individuals and families in North Carolina make well-informed decisions about their estates and the conveyance of their assets to their family members and loved ones. It’s understandable to have concerns about the impact of taxes on the distribution of your assets and to wonder whether your estate plan needs to be revised based on the significant changes in the recently enacted tax reform legislation.

A knowledgeable estate planning attorney at Brady Cobin Law Group, PLLC can meet with you, listen to your concerns and discuss your goals and how to achieve them. For more than 35 years, our dedicated Raleigh attorneys have helped people throughout North Carolina develop estate plans to provide for the financial security of those they love and to reduce the impact of inheritance taxes. At Brady Cobin Law Group, our practice is focused on estate planning and elder law. Our respect for our clients guides the legal service we provide to honor clients’ lives, aspirations and charitable interests.

Attorney R. Dan Brady has been practicing law since 1982 and is recognized by the North Carolina State Bar as a Board-Certified Specialist in Estate Planning and Probate Law. That is a designation held by only a small percentage of lawyers in North Carolina. Dan also brings the financial acumen of a Certified Public Accountant to tax issues that arise as part of estate planning. Attorney Andrew J. Cobin focuses on helping individuals and families build more financially secure lives through careful estate planning. Before going into private practice, Andrew previously served as a judge advocate general in the U.S. Navy for seven years. The attorneys at Brady Cobin Law Group, PLLC focus on understanding our clients’ financial needs and building quality, long-lasting attorney-client relationships.

Who Has to Pay Estate Tax?

The federal estate and gift tax as currently structured primarily affects families with significant wealth.

The Tax Cuts and Jobs Act passed by Congress and signed into law by President Trump increases the unified lifetime gift and estate tax exemption to $11,200,000 for individuals and $22,400,000 for married couples.

For deaths in 2018, individuals may pass on up to $11.2 million in assets to their heirs without triggering estate or gift taxes. Couples can convey twice that amount without owing estate taxes.

Further, the amount exempted from estate and gift tax is scheduled to increase based on an inflation index each year through 2025.

The more generous tax exemption in the new law makes it important to have a knowledgeable estate planning attorney review your existing estate plan and identify opportunities to reduce your estate tax burden.

The highest marginal federal estate and gift tax rates are still at 40 percent. If an asset is left to a spouse or to a federally recognized charitable organization, estate tax usually does not apply.

After the death of a spouse, the surviving spouse may use any of the unused portions of the gift and estate tax exemption that had not be used by the spouse who died. This provision of the tax code provides an additional tax deduction to help people convey assets to their children and other beneficiaries.

Some states impose a state inheritance tax on estates or on the people who inherit the property. The State of North Carolina does not have a state inheritance tax. If you reside in North Carolina and believe that your estate may be subject to federal estate or gift taxes, you should consult a knowledgeable estate tax attorney at Brady Cobin Law Group, PLLC.

Regardless of whether you expect to owe estate taxes, you also should have an estate plan to provide financial security for the surviving spouse and preserve assets for your children and future generations and the charitable organizations that reflect your values.

Gifting Strategies to Reduce Tax Obligation

To reduce your tax liability, you may want to consider gifting strategies to shift assets to your children or to charities without tax consequences.

The annual gift exclusion is $15,000 in 2018, which means you can give $15,000 per individual ($30,000 per married couple) to as many people as you wish, without affecting your lifetime exemption. You can gradually pass on your estate through gifting and reduce the value of the estate subject to taxation.

Can you avoid inheritance tax with a trust?

There are situations where a trust may be established and used to reduce the impact of estate and gift taxes. You transfer some of your assets into the trust which takes ownership of the assets and distributes the assets as you have directed.

Trusts are complicated to structure and have both benefits and disadvantages that should be understood. A trustee is appointed to oversee the trust. If you establish a trust, you may handle the duties of trustee during your lifetime. It is important to have a qualified estate tax attorney to review your specific situation and provide guidance on whether the creation of a trust is appropriate.

You may lower the value of your estate and reduce your estate tax liability by transferring part of your assets to a charitable trust such as a charitable lead trust or a charitable remainder trust. Doing so allows you to make a generous tax-advantaged gift to a charity and maintain an income stream for yourself or others. Alternately, you may establish planned giving to a charity with the remainder of the trust going to your designated beneficiaries when the trust expires.

With some charitable trusts, you can continue to make money off the assets in the trust during your lifetime and have the remainder of the assets go to charity at a designated time.

You also can fund a qualified personal residence trust (QPRT) to reduce the number of your assets that will be subject to estate tax. You can transfer the ownership of your primary residence or vacation home into a trust, freezing the market value of the property. You can continue living there and reduce the size of your estate. When the term of the trust expires, your beneficiaries can receive the property.

Whether a trust is appropriate for you and your family depends on the size of your estate and your goals for the future.

Why do you need an estate tax planning lawyer in North Carolina?

Tax laws and individual financial and personal situations change over time. A will or estate plan drafted five or 10 years ago may need to be updated to address changes in the tax code or changes in your life. Estate planning and planning for the distribution of your assets after your death can be an emotional experience. It is important to work with an experienced and compassionate estate planning attorney who can offer trusted guidance.

An estate planning lawyer at Brady Cobin Law Group, PLLC can review your situation, discuss your aspirations and offer smart estate tax planning strategies to minimize the effect of inheritance and gift taxes. We have helped many North Carolina families plan for the future and navigate the probate process after the loss of a loved one. Contact us today to learn how we can assist your family. Learn about the Truth About Estate Tax.

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