Gainesville elder and special needs attorney talks about what is taxable when it comes to an estate, and what you would be paying taxes for.
If You Need Legal Help
For any questions, or more information, contact the law firm of The Miller Elder Law Firm at (352) 379-1900.
“The estate taxes are the only tax that we have that are optional. You do not have to pay estate taxes, no matter how much money you have in the United States. There are ways and strategies, we can use GRAP planning, we can use all kinds of things, ILITS.
If we what we did in that scenario that I just spoke of, where we have $1.5 million in assets, and we have $500,000 as life insurance proceeds, one of the strategies that’s very easy to do and easy to set up is something called an ILIT, or an irrevocable life insurance trust. What you basically do is you take that $500,000 worth of life insurance and you create a separate entity that then owns that life insurance policy, so the trust itself becomes the owner of the policy. It takes it out of your estate and puts it in this trust’s estate. Now you only have a million dollars in assets, so when you die, that life insurance trust becomes its own separate entity and is not taxed.
You’ve just saved yourself $250,000 or $300,000, depending on if you’re at 45 or at 55. You’ve saved yourself quite a substantial amount of taxes by doing that simple thing, just taking the title of that life insurance and putting it into an irrevocable life insurance trust.”