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Estate Tax Planning

Without careful planning, much of your life’s legacy could be lost to estate taxes. While a simple will can provide for the transfer your estate to your loved ones, it does not have special provisions for advanced estate tax planning.

The Federal Estate tax: Exemptions & Rate
Federal estate tax laws were updated in 2013 as part of the American Taxpayer Relief Act which provides for an exemption of $11.4 million.  This means that each individual can transfer up to $11.4 million in assets free of federal estate taxes.   The federal estate tax exemption, also referred to as applicable exclusion amount is adjusted annually for inflation.  

The taxable value of the estate is calculated by adding up all the assets owned by the individual and subtracting from that total any of his or her liabilities.  Additional deductions can be taken for qualified charitable deductions as well as administrative and legal costs involved in settling the deceased’s estate.

The tax rate for estates exceeding the exemption amount is 40%.  The rate is applied to the taxable estate value that is in excess of the exemption amount.

Special Planning for High Net Worth Individuals
Individuals and families with significant net worth might still have taxable estates even if they take full advantage of their respective exemptions.  For these individuals, there are a variety of advanced planning techniques that can be crafted to help reduce the estate tax burden, such as strategic gifting plans, life insurance trusts, personal residence trusts and grantor retained annuity trusts.  



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9655 Granite Ridge Drive, Suite 200, San Diego, CA 92123
| Phone: 858.717.8035
440 Stevens Avenue, Suite 200, Solana Beach, CA 92075
| Phone: 858.717.8035

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