Tax Planning

Planning for Estate Taxes

There are many well-established strategies that can reduce or eliminate estate taxes, but you must carry out the planning process while you are alive and have the mental capacity to do so in order to implement these plans.

You need to be aware that many states have separate estate and inheritance taxes.  If you own property in more than one state, your taxable estate may be subject to the taxes of more than one state.  

Whether there will be any tax to pay depends on the size of your estate and how your estate plan works.  There has been a lot of discussion on Capitol Hill about changing the federal estate tax.  Subject to possible changes in the future, the current federal estate tax for U.S. citizens and long-term U.S. residents is the following:

  • In 2009, there is no estate tax if the net total of your assets is below a $3.5 million threshold.  A maximum tax rate of 45% could apply to assets transferred above this threshold.
  • In 2010, the estate tax will be repealed for one year, but replaced by the elimination of “stepped-up” basis.
  • In 2011, the $3.5 million threshold will be reduced to $1 million and the maximum tax rate will be 55% with a 5% surtax on certain transfers over $10 million.

For further information about estate tax planning techniques such as Credit Shelter Trusts, Marital Trusts,Life Insurance Trusts, and other Irrevocable Trusts, please call Miorini Law, PLLC at (703) 448-6121 or send an e-mail to