Colleyville Lawyers Providing Reliable Guidance On Federal Estate Tax Planning

When drafting your estate plan, you must not forget to budget for taxes. While Texas has no inheritance or estate tax, you may still be subject to the federal estate tax. At Early Law Firm in Colleyville, we want to help you understand what this means for assets and surviving loved ones. Our dependable estate planning attorney can help you navigate through this with confidence.

What Is The Federal Estate Tax?

The federal estate tax collects payments on the transfer of property at your death. This includes shifting real estate properties, retirement accounts and life insurance proceeds to your beneficiaries.

Not all families in Colleyville must pay federal estate tax. If your total estate value and lifetime taxable gifts are lower than $15 million, your estate will generally not owe federal estate tax. However, if your estate is worth more than this threshold, you can expect 18% to 40% rates on the taxable portion exceeding the limit.

Ways You Can Avoid Federal Estate Tax In Texas

Thinking about the additional amount you have to pay after death can be overwhelming. Fortunately, estate planning includes finding applicable strategies for reducing your total estate value:

• Irrevocable trusts: Allow you to remove assets from your taxable estate, provided that you surrender control and retain no rights over the assets.
• Life insurance trusts: Hold life insurance outside the taxable estate to supply tax-free liquidity.
• Gifting strategies: Give up to $19,000 per recipient annually or fund education plans.
• Charitable planning: Donate assets to qualified charities during your lifetime.
• Marital deductions: Transfer assets to a surviving U.S. citizen spouse.
• Generation-skipping planning: Structure transfers to grandchildren or later generations while managing Generation-Skipping Transfer (GST) tax exposure.

It is critical to distinguish between probate and tax planning. Avoiding probate does not mean avoiding estate taxes. A revocable trust bypasses Texas probate court but remains part of your gross taxable estate.

Texas offers streamlined probate options, such as Independent Administration and Muniment of Title, which make probate relatively efficient compared to other states. However, comprehensive planning addresses both court avoidance and federal tax mitigation.

Learn More About Estate Tax Planning With Early Law Firm

The last thing you want is to leave your family with expensive federal estate taxes. Our estate planning lawyer, Steven A. Early, offers his legal services for families in Colleyville, Texas. Schedule a consultation with him by calling 817-605-8880 or emailing us.