Law Office of Rick Todd Blog

Friday, July 13, 2018

Estate Tax Planning in Howard County: How to Protect Your Assets

Are you in need of professional litigation advice on estate tax planning in Howard County? The law offices of Rick Todd provide you with the most recent and updated laws on estate tax planning in Howard County. According to the 2018 federal estate tax, exemptions now favor wealthy individuals with over $11 million in assets. For instance, their tax exemption for estate, gift, and generation-skipping taxes is now $10 million. Moreover, the laws protect the assets transferred as a gift at death from taxes.

Nonetheless, for people with assets less than $11 million, creating a trust fund can help to shield assets from estate taxes. A trust fund protects assets from federal estate taxes and from creditors' manipulation, as well as unforeseen circumstances from heirs’ influence. The trustees are bound by the law to ensure that the money that one bequeaths serve the intended purpose for the designated heir.

Although trustees help to protect the inherited funds from estate taxes, sometimes the inheritances can still be diminished by taxes and expenses. It is financially appropriate to plan and manage an inheritance strategy to avoid an estate's taxes and expenses. The following tactics can promote better use for inheritances:

  • Draw up a will: A will is an important document that protects one's beneficiaries from bills and expenses that accrue from a probate court, which is mandated to divide property in its absence. In a situation where a person fails to draft a comprehensive will, the attorneys divide the property which accumulates to an expense to the beneficiaries.
  • Include all the beneficiaries for inheritances: For those benefits from assets, such as money from retirement benefits and lump sums from life insurance policies, there is a need for the policyholder to review the appropriate and required information to avoid further expenses in a probate court.
  • Convert traditional retirement accounts to Roth accounts- Traditional IRAs are subject to taxes that can accrue over time and even be transferred to the beneficiaries. 401(k)s also experience the same tax accumulation over time. However, Roth accounts have a tax-free distribution, which can guarantee fewer income taxes.

Estate Tax Planning in Howard County

If you are looking for assistance with your estate planning in Howard County, Columbia Estate Planning should be your first choice. The Law Offices of Rick Todd can help you successfully prepare for your future and the future of your loved ones.

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The Law Offices of Rick Todd has offices located in Columbia, Chevy Chase, Fairfax, Virginia, and Maryland and serves clients throughout Clarksville, Columbia, Ellicott City, Fulton, Rockville, Bethesda, Potomac, Laurel, Howard County, Montgomery County, and Washington D.C.

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