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Estate taxes can often be avoided with dynamic estate planning

On Behalf of | Dec 22, 2017 | Firm News, Wills |

Most Ohio residents would probably prefer to pay as little in estate and inheritance tax as possible. This is especially true in the case of untimely deaths. The last thing a grieving family wants to deal with is extra taxes. The story of the so-called ‘death tax” is an infamous part of the history of Congresswoman Kristi Noem. Despite the Representative’s claims, a close examination of her story and documents points to poor estate planning rather than unfair tax laws as the culprit. The lesson of the Noem family can serve as a memorable lesson for all taxpayers.

A strong take away from Noem’s story is that tax laws change, and it’s important for estate plans to change with them. Noem’s father created a decent will in 1976, but he didn’t bother to change or update that will when the laws changed between 1981 and 1994. As a result, his family did have to deal with an inheritance tax burden of nearly $170,000. Had he changed his will to better take advantage of more recent laws, his estate would probably have escaped all tax liability.

Another part of the Noem story focuses on how a family can deal with high or unexpected tax liability, especially when a family member passes unexpectedly. The government provides a variety of options to defer a large tax burden, and they may offer low-interest loans that would be superior to private loans or asset liquidation to pay the tax.

At all stages of the process, an estate planning attorney can help a family with many assets preserve what they have from excessive taxation. The fabled death tax is often entirely avoidable with proper planning and understanding of modern tax laws. Wills should be drafted and changed as circumstances change, and no estate plan should ever be considered set in stone.

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