Tampa Federal Estate Tax Lawyer
If you are fortunate enough to be blessed with a large estate, you already know that financial matters are more complex for the wealthy than they are for people of lesser means, and estate planning is by far no exception. One critical aspect that must be considered in estate planning is the federal estate tax, which can have a significant impact on the value of the estate passed on to your heirs and beneficiaries. Below we explore the basics of the estate tax, its implications, and popular strategies for minimizing its impact. For help creating an estate plan customized to your needs and goals, or to revise a current plan already in place, contact Messina Law Group to consult with our skilled and knowledgeable Tampa federal estate tax lawyer.
What Is Federal Estate Tax?
The federal estate tax is a tax imposed by the U.S. government on the transfer of the taxable estate of a deceased person. It is calculated based on the fair market value of all assets owned by the deceased at the time of death, including cash, real estate, investments, and other property. The tax is paid by the estate before any assets are distributed to heirs.
Federal Estate Tax Exemptions and Rates
One of the key features of the federal estate tax is the exemption amount, which is the value of assets that can be passed on to heirs tax-free. As of 2024, the federal estate tax exemption is $13.61 million per individual, which means that estates valued below this threshold are not subject to federal estate tax. For married couples, the exemption can be effectively doubled, allowing them to pass on up to $27.22 million without incurring federal estate tax.
The tax rate for amounts above the exemption threshold ranges from 18% to 40%, with higher-value estates subject to higher tax rates.
Impact of the Estate Tax on Tampa Residents
For Tampa residents with large estates, understanding the federal estate tax is essential for effective estate planning. While Florida does not impose a state-level estate or inheritance tax, the federal estate tax will still apply to estates exceeding the exemption threshold. This means that individuals with significant assets, including real estate in the Tampa Bay area, should be aware of the potential tax implications and plan accordingly.
Estate Planning Strategies to Minimize Federal Estate Tax
There are several strategies that Tampa residents can employ to minimize the impact of federal estate tax on their estates:
- Lifetime Gifts: Utilizing the annual gift tax exclusion ($18,000 per recipient in 2024) and the lifetime gift tax exemption (which is tied to the estate tax exemption) to transfer wealth during your lifetime can reduce the size of your estate subject to taxation upon death.
- Trusts: Establishing certain types of trusts, such as irrevocable life insurance trusts or charitable trusts, can remove assets from your taxable estate and provide tax benefits.
- Marital Transfers: Assets transferred to a surviving spouse are generally exempt from estate tax due to the unlimited marital deduction, provided the spouse is a U.S. citizen.
- Portability Election: For married couples, any unused portion of the estate tax exemption of the first spouse to die can be transferred to the surviving spouse (known as “portability”), effectively increasing the surviving spouse’s exemption amount.
- Charitable Contributions: Leaving a portion of your estate to charity can reduce the size of your taxable estate and provide a charitable deduction.
Contact Messina Law Group for Smart and Strategic Estate Tax Planning in Tampa
For Tampa residents with substantial assets, federal estate tax can be a significant concern in estate planning. By understanding the tax implications and employing effective strategies, it’s possible to minimize the tax burden and ensure that your assets are fully distributed according to your wishes. Call Messina Law Group to consult with our experienced Tampa federal estate tax lawyer who can provide personalized guidance and help you navigate the complexities of federal estate tax planning.
