Estate Planning and Estate Taxes

[Steven Nguyen]

With the current TCJA the estate tax exemption is 11.18 million (single) and 22.26 million (married).  Any estate in excess of these thresholds are taxed at 40% in CA.  For example, if you are worth 20 million as a single person and pass away, the beneficiaries will pay 3.6 million in estate tax to the IRS within 9 months.  I know with real estate, it's easy to build an estate above 11 million or the government may lower the estate tax exemption to around 5 million (single).  What are you doing to plan for estate taxes?  I started an indexed universal life insurance policy that is max funded to be utilized as tax free income, disability insurance, infinite banking, and provide a lump sum death benefit to help pay off estate taxes for my future kids.

Thanks for any insight!

[Katie L.]

@Steven Nguyen

If you're concerned about estate taxes, I highly recommend that you sit down with an estate planner to go into your options to reduce estate taxes.  There are a ton of ways that you can do so, but they will be highly personal to your estate, your assets, and your goals.  The estate tax exemption is currently scheduled to increase until 2026, at which time it reverts back to its lower value prior to the Tax Cuts and Jobs Act.  President-Elect Biden has proposed reducing the exemption, possibly sooner than 2026, but that remains to be seen whether it becomes an actuality or not.

*This post does not create an attorney-client or CPA-client relationship.  The information contained in this post is not to be relied upon.  Readers are advised to seek professional advice.