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Estate Tax Protection & Planning Attorney in Carlsbad, California

Taxes. This is something all of us are familiar with. Taxes must be paid, but if there is a legal way to reduce your tax bill to put more money into your pocket, rather than the government's pocket, chances are, you will choose the path that benefits you directly.

During your life, you pay sales tax, State income tax, Federal income tax, property taxes, and so on. You would think that once you die, you are done paying taxes. This isn't always the case. Your money could still be subject to estate tax. Fortunately, in California, we do not have a State estate tax, meaning, estate taxes are not paid at the State level. However, California is subject to the Federal estate tax. For every dollar you own over the estate tax exemption amount in place at the time of your death, will be taxed.

There are special planning techniques that can be used and are recognized by the IRS, to reduce estate taxes. At North County Legal, APC, we can help you reduce—if not entirely avoid—the federal estate tax burden.

Picture of a building How Does the Estate Tax Work?

The estate tax is separate tax from federal income taxes. It is a tax that is paid on the net value of all your assets owned at the time of your death. Currently, estates under $11.7 million do not need to worry about the estate tax.

For those who are subject to estate tax though, the estate tax rate is 40% on all assets exceeding the estate tax exemption amount. Those whose estates are subject to estate tax could have tons of money going to the government rather than their heirs. Also, the estate tax bill must be paid to the IRS within 9 months of the decedent’s death. Many wealthy individuals do not necessarily have liquid assets readily available to pay such high estate taxes, which is why doing advanced planning is even more than vital if you fall into this category.

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Exemptions to the Estate Tax

President Trump’s Tax Cuts and Jobs Act of 2017 drastically increased the allowable exemption for estate tax, which allows even more families the ability to leave assets to their loved ones estate tax free.

  • Estate tax exemption for individuals expanded from $5.45 million in 2016 to $11.7 million in 2021.

  • Estate tax exemption for married couples expanded from $10.9 million in 2016 to $23.4 million in 2021.

If your estate is currently valued at less than $11.7 million, you do not have to worry about your estate being subject to estate taxes upon your death. For those with estates over $11.7 million, there are a number of estate planning strategies available, which can be used to help reduce your estate tax burden upon your death.

Advanced Estate Planning Strategies

High net-worth individuals face several complex legal and tax issues—and the estate tax is only one of them. At North County Legal, APC, we can help these clients through a variety of advanced estate planning strategies which can reduce your taxable estate.

Some more commonly used advanced estate planning tools and strategies include:

  • Life insurance trusts

  • Irrevocable trusts

  • Grantor retained annuity trusts

  • Charitable trusts

  • Gifting