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Newly announced estate tax exemptions could affect wills

Most Georgia residents are aware that a portion of the wealth they leave behind could be subject to taxation. In fact, some structure their wills and trusts around minimizing those obligations. One type of tax that applies after death is called the estate tax. There are thresholds that define when that tax is triggered, and the Internal Revenue Service recently announced an increase in estate tax exemptions for 2019. 

In 2018, an estate valued below $11.4 million per individual is not subject to the estate tax. That number is more than double the exemption of $5 million in place in 2013, and far more than the $675,000 exemption in effect in 2000. The 2019 number won't be permanent, however, unless legislation is passed before the new exemption expires in 2025.

Paying the estate tax is not a consideration for most Georgia families. If fact, at the current exemption level there were fewer than 2,000 taxable estates throughout the entire country. That doesn't mean, however, that tax issues aren't something to consider. When structuring an estate plan, there are ways to reduce the tax burdens left to one's chosen heirs. 

Handing down real estate, artwork, investment accounts, and many other types of assets can have tax ramifications. Without proper planning, loved ones can encounter a nasty surprise when those taxes come due. The best way to minimize taxes is to work with an estate planning attorney to create wills and trusts that offer the best possible outcome. With a little planning, it's possible to both make good on one's tax responsibilities while also handing down wealth to the next generation.

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At Hodges Law Firm, we handle a wide range of legal issues for clients throughout the Atlanta area, including elder law, estate planning, probate, Medicaid planning and protection, asset protection, litigation, and business law and services. We are knowledgeable in the law and understand the real life implications of legal actions.