Begin Protecting Your Legacy with The TGQ Law Firm
Leaving a large estate to loved ones after you die is admirable. But unfortunately, the larger your estate, the greater your risk of facing estate taxes that ultimately lower its value for your descendants.
Strategic estate planning is a critical tool for minimizing your tax burden and safeguarding assets for future generations. As leading estate planning attorneys in Ann Arbor, MI, The TGQ Law Firm is well versed in local and federal tax laws. We can provide an estate tax breakdown and craft personalized solutions for your family.
What Are Estate Taxes, and Who Do They Affect?
Estate taxes are taxes your loved ones might incur on the transfer of your property after your death. If the value of your assets exceeds the filing threshold during the year of your death, your loved ones will likely need to file a return at the federal level. Individuals with substantial assets are at the highest risk of facing these liabilities, but changing laws could expand this concern over time.
The current federal exemption threshold for 2025 is $13,990,000, and this limit increases every year. If the value of your assets exceeds this amount, you need to prepare for estate taxes. Our Ann Arbor, MI, estate planning attorneys can help you account for these taxes in your plan.
Exemption Thresholds and Key Tax Considerations
To determine whether your assets would incur the federal estate tax, your attorney will calculate the total fair market value of all your accounts and property, which is considered your “gross estate.” Then, they can deduct mortgages, other debts, administration expenses, assets that pass to a surviving spouse, and qualified charities. This net value, plus the value of your lifetime taxable gifts, determines your tax.
The “unified credit” allows you to reduce your estate’s exposure to future taxes by making gifts of up to $13,990,000 during your lifetime. Federal estate taxes also follow a “step-up in basis,” meaning the cost basis of inherited assets is their fair market value on the date of your death, not how much you paid for them.
Proven Strategies to Minimize Tax Liabilities
While this estate tax breakdown may seem burdensome, you can implement strategies to minimize your liability. For example, irrevocable life insurance trusts (ILITs) can legally remove certain assets from your taxable estate. This tool can create a financial safeguard for your heirs while ensuring compliance with federal and local regulations.
You might also consider gifting certain assets during your lifetime. You can gift up to $13,990,000 during your lifetime without facing taxes. You can also take advantage of the annual gift exclusion of $19,000 in 2025, which does not contribute toward your lifetime gift amount.
These strategies can protect you against the estate tax while still maintaining your goals for wealth preservation and distribution.
Why Professional Guidance Matters for Effective Planning
Navigating regulations and exemptions can be complicated without the right background and experience. Let our estate planning attorneys at The TGQ Law Firm simplify this process for you while meeting your family’s specific needs.
We can help you interpret laws that apply to your assets and maximize available exemptions. Proactively planning now ensures that your assets are ready to pass to loved ones when the time comes. It also gives you time to craft a plan tailored to your individual circumstances.
You must work with an attorney who understands Michigan’s specific laws. Our lawyers have helped countless Michigan-based clients create watertight plans that adhere to both state and federal requirements.
Preserve Wealth and Ease Tax Burdens with The TGQ Law Firm
Understanding this estate tax breakdown can help you prepare for and mitigate potential liabilities. Your descendants may face significant taxes if your assets and property are worth more than $13.99 million. If you want to maximize wealth preservation, prioritize early planning with the help of knowledgeable attorneys.
Turn to The TGQ Law Firm for proactive, tax-efficient planning strategies. We will create a custom solution that aligns with your goals and protects your financial legacy for generations to come.
Reach out to us today at 734-707-3232 or fill out our contact form to schedule a no-cost 15-minute consultation.
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