Tax planning

When an individual passes away they may owe Estate Taxes to the State of Maine and/or the Federal Government. The tax rates are constantly changing, and it is important to ensure your estate plan is designed to address any tax issues you may face. The taxes are assessed after an individual has passed away, based on the value of the estate. The concept of an estate includes all probate and non-probate assets, and may include the value of certain trusts. If your estate is over $5,800,000 (2020) you may be subject to an estate tax in Maine.

Federally, many of the same rules apply in calculating the size of an estate. You should be aware that gifts made during your life time, may require the filing of a gift tax return. You must file a gift tax return if you gift more than $15,000 (2020) to an individual in a year. This does not necessarily mean that taxes will be owed on the gift. The federal government only taxes decedent estates over $11,580,000 (2020), this is known as the “exemption amount.” When an individual files a gift tax return, it simply reduces your federal “exemption.” It is important, regardless of the size of an estate, to stay up to date on gift tax returns.

Carlin & Shapiro, P.A. can help you analyze your estate’s tax liability, file gift tax returns, and file estate tax returns. We can help you develop an estate plan that can reduce or eliminate any estate tax exposure.