In a recent interview, leading estate planning attorney Kelly Shovelin, founder of Four Pillars Law Firm in Wilmington, NC, revealed 3 tax secrets that the government wants to keep hidden from taxpayers. —
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When asked for a comment, Shovelin said, "Many people put estate planning thoughts on the backburner - this is particularly prevalent with the new tax code and estate tax implications that were put into place last year. However, many people are unaware of how they legally benefit from the new exemption."
Under the new tax bill, the estate tax exemption is now $11.2 million per individual - or $22.4 million per couple - which is double from what it was previously.
Shovelin was quick to add that the caveat is that this exemption is temporary, and it will go back to the old rate of $11.2 million per couple in 2026.
One way to shield an estate from taxes, according to her, is by using the portable clause.
"The $11.2 million estate tax is portable, which means that should you pass away, your spouse can use the exemption. In other words, if the estate is worth less than $22.4 million, then it may not be estate taxable between 2018 and 2026. It's important to note that you have to claim the exemption when filing an estate tax return, otherwise the estate will be taxed."
Life insurance is another way to protect an estate from taxes.
"Different life insurance plans offer ways for you to lower your tax liability. So for example, whole life insurance plans allow for a potential tax-free death benefit. In addition to this, assets invested with a life insurance policy increase in value on a tax-deferred basis. This is important as it allows for the money to accrue more quickly" Shovelin said.
Another way to make the most of the newly introduced tax exemption is by setting up an irrevocable trust.
When asked to elaborate, she said, "An irrevocable trust allows you to separate any of the assets you put in the trust from your estate and exempt them from estate taxes. After setting up the trust, you can then add your spouse as the trust's beneficiary, which will allow them to receive the assets."
Shovelin further added that should a spouse pass away, then their children could get the assets without paying income tax.
"Learn about options available to you in helping to legally minimize estate taxes while operating under the new tax code by consulting with an experienced estate planning professional," she said.
Name: Kelly Shovelin
Email: Send Email
Organization: Four Pillars Law Firm
Address: 2202 Wrightsville Avenue, Suite 213 Wilmington, NC 28403
Phone: (910) 762-1577
Source URL: http://RecommendedExperts.biz
Release ID: 88978753