Estate tax planning is one of the most common motivations for estate planning. Without careful planning, much of your life’s legacy could be lost to estate taxes.
While a simple Will can provide for the transfer of your estate to your loved ones, it does not contain special provisions for state and federal estate tax planning.
At the Socius Law Firm, we employ a variety of tools and strategies to minimize or even eliminate your tax burden. These include gifting, business valuation discounts, low interest loans, charitable and marital deductions, deferred compensation agreements and more. The comprehensive plan we design for you can also provide the flexibility needed to deal with changes to the tax codes.
Our goal with respect to tax planning is to help you leave the largest possible amount of your assets to your children, a charity of your choosing, or any other people or institutions you see fit—as opposed to letting the government obtain a substantial portion of all that you have worked so hard to achieve.
The Socius Law Firm helps individuals and families with foundational trust-based estate planning that can minimize – if not 100% eliminate – estate taxes.
Your taxable estate comprises the total value of your assets including your home, other real estate, business interests, your share of joint accounts, retirement accounts, and life insurance policies minus liabilities and deductions such as funeral expenses paid out of the estate, debts owed by you at the time of death, bequests to charities and value of the assets passed on to your U.S. citizen spouse.
Any taxes imposed on the taxable portion of your estate are then paid out of the estate itself before distribution to your beneficiaries.
If you are a Massachusetts resident that passes with an estate of $1.0 million or more, your estate will owe an estate tax to the Commonwealth of Massachusetts.
Given the high value of real estate in Massachusetts, as well as common life insurance policies and retirement assets, your estate can quickly add up to $1.0 million or more.
For example, a married couple with total assets of $1.5 million may have simple, or “I love you” Wills that leave all assets to the survivor with ultimate distribution to their children. This type of estate plan has the advantage of simplicity; however, it does not take advantage of planning opportunities to minimize or otherwise eliminate Massachusetts Estate Taxes.
With Socius’ foundational trust-based estate planning and other more advanced planning strategies, this same married couple (with a combined estate of $1.5 million), can effectively eliminate all liability for the Massachusetts Estate Tax in 2018.
You can learn more about Massachusetts Estate Taxes by visiting the Massachusetts Department of Revenue website.
In consideration of federal estate taxes, for 2018, an individual is allowed an exemption from Federal Estate Tax in the amount of $11.2 million. This means that each individual can transfer up to $11.2M in assets free of Federal Estate Taxes.
The taxable value of the estate is calculated by adding up all the assets owned by the individual and subtracting from that total any of his or her liabilities. Additional deductions can be taken for qualified charitable deductions as well as administrative and legal costs involved in settling the deceased’s estate.
The tax rate for estates exceeding the exemption amount is 40%. The rate is applied to the taxable estate value that is in excess of the exemption amount ($11.2M).
In addition to the individual exemption, married couples enjoy an unlimited deduction for transfers to one another. While this is great news for many couples who choose to leave their estate to each other, without proper planning, it can result in a forfeiture of some of the individual estate tax exemptions after the passing of the second spouse.
For example, this can occur when a husband leaves $8M of his individually-owned assets to his surviving wife who already has $8M herself, bringing her total net worth to $16M. The bequest to his wife is not subject to estate taxes because it qualifies for the unlimited marital deduction. After some time, the wife also passes away, leaving everything to the children. While her estate can take advantage of her individual exemption of $11.2M, the rest her estate could be subject to Federal Estate Taxes because her husband’s individual exemption was not utilized.
To address this issue, the current Federal Estate Tax law allows for “portability” of individual exemptions between spouses. Stated another way, estate tax portability enables the surviving spouse to utilize the unused portion of the first-to-die spouse’s estate tax exemption. Portability is not automatic and in order to take advantage of it, a Federal Estate Tax return must be filed with the IRS within 9 months of the passing of the first spouse, even if there are no taxes due at the time.
An alternative to relying on portability is to utilize a special planning tool referred to as a credit shelter trust (also referred to as a Bypass Trust or A-B trust). If properly established, such trusts work much in the same way as portability, but do not require filing of a Federal Estate Tax return after the passing of the first spouse.
Individuals and families with significant net worth may still have taxable estates even if they take full advantage of their respective exemptions. For these individuals, there are a variety of advanced planning techniques that can be utilized to help reduce the estate tax burden, such as strategic gifting plans, irrevocable life insurance trusts, personal residence trusts and grantor retained annuity trusts.
Learn more about Advanced Estate Planning.
As a professional and business owner I expect excellent performance and results from other professionals. I can say without hesitation that Todd Rosenfield and the Socius Law Firm have met and exceeded those expectations. Todd’s experience as a Estate Planning and Business Attorney make him exceptionally qualified to address a wide variety of issues. As a husband and father, as well as a business owner, I have peace of mind and sleep well at night knowing that Todd has me covered. I have utilized Todd’s services for over 10 years in a variety of legal and trust matters.
“I have depended on Todd Rosenfield to provide exceptional advice and counsel for both my personal estate planning and business needs for over 15 years. He has always taken care of every detail to ensure my issues are resolved promptly and thoroughly. I can recommend Todd without hesitation as an expert attorney.”
“I brought my parents to Socius for an estate planning consultation. They were a bit nervous and unsure if they needed a revocable living trust. Attorney Rosenfield took the time to explain the options and was very patient. We hired him on the spot.”
“We liked Attorney Rosenfield for his professionalism, knowledge and willingness to share it, and his good nature. Todd’s approach to navigating the estate planning design process helped us understand legal concepts that otherwise might have been confusing or made us feel uncertain. We were unconditionally satisfied every step of the way, including the pace of events leading to our completed Estate Plan.”
We had Mr. Rosenfield help us with the adoption of my daughter by my husband. Mr. Rosenfield is both professional and very easy going and made adoption day go very smoothly for us. Knowing that I work in Boston and live 40 miles away, he was mindful of my work and commuting schedule and was very accommodating to that. Adoption day was stress free and he took care of everything and made it a very joyous event. He even emailed us pictures of our special day! Highly recommend Mr. Rosenfield and will be looking to him for additional services in the future with family estate planning.
“Todd was my primary council for three years when I was CEO of a Medical Device precision component manufacturer in Massachusetts. Todd was very competent and reliable as a lawyer and quickly established himself as a trusted advisor to senior management on a wide variety of issues and opportunities. I would work with Todd again without hesitation and highly recommend him.”
After having our first baby, my wife and I decided that we needed an estate plan to ensure our daughter was taken care of in case something happened to both of us. We were recommended to Todd and the Socius Law Firm by a coworker. I can’t give enough praise to Todd for how easy and painless he made this process.
“Todd is one of the most knowledgeable attorneys and is unbelievably adept at handling a wide range of legal issues that are applicable to small to medium-sized businesses. At the same time, he is one of the most caring and trustworthy individuals I’ve worked with, always seeking to understand his clients’ goals and recommending the best actions to achieve those goals.”
Recently we decided it was time to update our estate plan. We spent a good amount of time researching the right attorney given our circumstances and selected Todd from a list of recommended estate planning attorneys. The results were outstanding. He was very detailed in his analysis of our needs, goals and objectives. As he prepared our documents, he communicated his thoughts and made recommendations that made a lot of sense. We could not be more pleased with the results.
When my father passed away, it was a very upsetting and confusing time. Thankfully, he had the foresight to consult with Todd Rosenfield and introduced us to his law firm. The process of settling the estate and trust went smoothly and Todd took care of every detail. We are very thankful.
I met with Todd to get my estate planning done for my family. Todd took the time to explain everything to me and helped me understand what was right for our needs. We decided to go with him and his firm cause of how professional, thoughtful and caring he was! It was a very smooth process. We were leaving our young children and wanted to make sure our estate plan was in place before traveling out of the country. We were comforted knowing it was all in place and settled for our kids. I highly recommend Todd and encourage you all to get your estate planning done!
We had been putting it off estate planning for years. After the birth of our son, my husband and I decided it was time to get our house in order. We hired Todd and could not be more pleased with the results. Todd was terrific to work with… smart, professional and insightful. The process was painless, and he guided us along each step of the way. I really appreciated him taking the time to explain everything to us and answer all of our questions. I highly recommend Todd to anyone looking to create or update their estate plan. Thank you Todd!
I am so very grateful that I was referred to the Socius Law Firm. Where to start? Todd made the whole process painless. He was very patient and professional. Todd took the time needed to explain any pertinent legal concepts which allowed us to make informed decisions regarding all of the issues for our specific estate planning needs. The presentation of the final product was the icing on the cake. Our estate planning documents came in a very organized portfolio as well as digital copies on a thumb drive. Thank you so much!
We offer four levels of comprehensive estate planning – each highly customized to meet your unique family situation. Plan fees are dependent upon your personal values, goals and objectives.
Call Us To Discuss Your Estate Planning Needs.
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