Estate Tax Planning

The Estate Tax (commonly known as the “Death Tax”) is based on the value of the decedent's estate at the time of death. The tax is paid by the estate before distributions are made to beneficiaries. Unlike incomes taxes, due to the complex rules and higher level of liability, estate tax returns are usually prepared by your attorney and not your CPA.

There are a variety of strategies that can result in significant estate tax savings for your family is used properly.

Federal Estate Tax:
Congress planned to do away with Federal Estate Tax in 2010, but they did not. After much internal wrangling, Congress settled on a $5 million estate tax exemption (actually, $5.25 million, adjusted for inflation). This means that you do not have to pay estate tax if your estate is less than $5 million … but that is not the whole story.

Do you have to be a fat cat to benefit from estate tax planning? The answer is no. Even if your estate is less than $5 million, you may still be able to take advantage of important elections at the death of the first spouse that will make sure that more of your hard-earned money will pass to your family or the charity of your choice... instead of the government!

Ohio Estate Tax:
Ohio repealed the Ohio Estate Tax as of January 1, 2013. Will it be permanent? That is anyone's guess, but for now, there will be no Ohio Estate Tax in the future.

Ohio Estate Tax is STILL DUE for those who died prior to January 1, 2013 if the value of their estate at death plus any gifts made within three years of death was greater than $338,333.