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Decorative box shape ESTATE TAX PLANNING Individuals work their entire lives to build financial security for themselves and eventually to pass wealth on to heirs. New York State and the federal government have estate tax systems that discourage large transfers of wealth as a means to force the redistribution of assets. But families need not lose substantial assets to taxes. There are several techniques and exemptions that apply in various circumstances which can create significant estate tax savings.

The taxing authorities allow certain exemptions which can be missed if not properly contemplated. These can be missed by over use of the marital deduction, failing to efficiently utilize charitable deductions and improper titling of assets. Basic tax planning can accomplish considerable tax savings.

When asset levels are such that the tax exemptions alone are not sufficient to eliminate estate taxes, additional techniques are available. These include proper titling of assets using tax favored trusts, aggressive discounting techniques or more complex gifting strategies permitted by the New York Tax Law and the Internal Revenue Code, which can substantially reduce or eliminate estate taxes.
Pellittiere & Jonsson PLLC provides the necessary guidance within the New York Tax Law and the Internal Revenue Code to avoid unnecessary taxes. By utilizing exemptions and tax planning techniques, clients can pass on assets to family members with little or no estate taxes. Further, charitable giving can be accomplished efficiently to minimize taxes, maximize the benefit to the charity and maximize the assets still passing to the family.
Proper tax planning includes analysis of:
  • New York Estate Tax Law
    - $5,850,000 per person exemption for 2020 with a tax rate of about 10%.
  • Federal Estate Tax Law
    - $11,580,000 per person exemption with a flat rate of 40%.
    - Subject to annual inflation adjustments.
  • Relevant laws of other states
  • Relevant laws of other countries
  • Review of family situation, particularly second marriages
  • Valuation of assets
  • Types of assets
Common techniques include:
  • Utilizing estate tax marital deduction
  • Life insurance trusts
  • Charitable trusts
  • Private foundations
  • Family limited partnerships
  • Qualified personal residence trusts
  • Grantor retained annuity trusts
  • Valuation discounts
  • Lifetime gifts
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