Estate taxes, inheritance taxes, death taxes. There are many names for the estate taxes and many myths and misconceptions to go with those names. Regardless of what you call them, estate taxes are a tax imposed on the value of everything you own at the moment of your death. The portion of your estate lost to estate taxes can be as much as fifty percent (50%).
The good news: estate taxes can be reduced, sometimes eliminated entirely, with proper estate planning and tax planning. Estate tax planning uses legal techniques approved by congress, the courts, or the IRS to reduce the taxes you pay. Although these planning tools can be complex to design, you do not need to know all of the complex details—that is what your attorney is for. Working with an attorney, you can learn what your options are to reduce estate taxes and choose the planning tools that work best for you. Your attorney can craft your plan and deal with the complexities so you do not have to think about them.
In Washington you do not pay estate taxes if your estate is less than two million dollars ($2,000,000). If your net worth exceeds two million dollars ($2,000,000) (or may exceed that amount by the time you die) you should speak with your attorney about what you can do to reduce estate taxes. To find out if you have a taxable estate, calculate the value of your estate by adding up the value of all of your assets including:
- Your home (less any outstanding mortgage);
- Bank and investment accounts;
- Life insurance (the amount that will be paid at your death);
- Retirement accounts;
- Collectibles and artwork;
- Any businesses you own or have an interest in;
- Household goods;
- Potential inheritances from your family; and
- Any other assets.
Contact our office to learn more about Estate Tax Planning. Our experienced estate tax planning attorneys can help you determine your potential estate tax liability then work with you to craft a plan to minimize your tax liability.