NOTICE: These FAQ pages provide informal guidance and should NOT be relied upon as legal advice. Submit a Client Intake Form or contact our office if you need legal counsel.

  • Who needs estate tax planning?
  • What is estate tax planning?
  • What is estate tax?
  • What is gift tax?
  • When should I begin estate tax planning?
  • Why should I have estate tax planning?

  • Who needs tax planning?

    • You need estate tax planning if you are:
    1. Single with a net worth of more than $1 million.
    2. A married couple with a combined net worth of more than $2 million.
    3. A non-U.S. Citizen living abroad with more than $60,000 in U.S.-based assets.

  • What is tax planning?

    • Estate tax planning means taking steps to reduce your taxable estate without triggering gift tax. This can include:
    1. Tax-free gifts
    2. Sales among family members
    3. Charitable giving
    4. Purchasing life insurance

  • What is estate tax?

    • Estate tax (sometime called the Death Tax) is a tax on your assets when you die. The tax is calculated as a percentage of your total assets on your date of death, including your:
    1. Bank, brokerage accounts and cash
    2. Stocks and businesses
    3. Real estate
    4. Life insurance
    5. Jewelry, automobiles, other valuables

    The current Federal estate tax is 45% of the value of your assets in excess of the $2 million dollar exemption. So, for example, if you die owning $3 million in assets, your surviving family will owe approximately $450,000 in Federal estate tax ($3 million assets is $1 million in excess of $2 million exemption. 45% of $1 million is $450,000).

    The current New York State estate tax applies to your assets in excess of $1 million at a lower rate with a more complicated calculation.

  • What is gift tax?

    • A Federal gift tax applies to most gifts you make during your lifetime at the same rate as the estate tax. This gift tax exists to prevent you from simply gifting away all your assets immediately before death to avoid estate tax.

  • When should I begin tax planning?

    • You should consider tax planning when:
    1. Your net worth reaches $1 million, if you are single.
    2. Your combined net worth reaches $2 million, if you are a married couple.
    3. Your U.S.-based assets reach $60,000, if you are a non-U.S. Citizen living abroad.

  • Why should I have tax planning?

    • Planning for your estate and gift tax is important because these areas are more likely to be audited.

    The Federal government audits estate and gift tax returns much more frequently than income tax returns (almost 50% of estate tax returns, compared to 1-4% of income tax returns). These audits are conducted by specially trained attorneys, and not return examiners.

    Complete our Will Intake Form to begin your Tax Plannning »