The old saying is that there are only two things you can’t avoid: death and taxes. It seems clear that there are other unavoidable parts of life. It seems impossible to avoid the Florida sun and heat or the sound of the ocean, for instance.
Regardless, there is nothing that can be done to help you avoid death, but there are steps you can take to avoid or minimize the so-called death taxes (also known as the federal estate tax).
Of course, those who have estates worth less than $11.4 million (the current exempt amount) don’t have to be concerned with the federal estate tax at the moment. (Note that the death tax exemption drops back to $5 million starting in 2026, so while you might be in the clear today, you could have estate-planning concerns tomorrow.)
How much is the federal estate tax? It is, in general, between 18 percent and 40 percent, but Forbes notes that “it gets to 40 percent pretty quickly”
The publication points out that there are some tax-related matters to be aware of. For example, do not think that you can simply gift your way out of the estate tax. If you generously share large gifts, those are likely to be part of the estate tax calculation and will be included as part of your estate when the tax is determined.
So if you have your children $5 million last year, that amount will reduce the exemption to $6.4 million.
Remember, too, that all assets matter. That means anything in your name or that you had control over will be included in your estate when the tax is determined. Stocks, bank accounts, real estate, business interests, jewelry, artwork, household furnishings and so on.
Talk to your estate planning attorney about how the estate tax will be calculated and how you can minimize its impact on those you love.