The main purpose of estate planning is to ensure that one is able to leave as much of their personal wealth to their designated beneficiaries in Columbus. This is the reason why so many estate planning experts recommend that people structure their estates to avoid processes that and obligations that can eat away at an estate’s assets. One element that can money away from an estate is estate taxes. Yet most likely assume that paying taxes on an estate is an inevitability. That may not be true in many cases.
The federal government has set an estate tax threshold, which according to Forbes Magazine is $11.4 million for 2019. If the total taxable value if one’s estate is less than that threshold, the estate is exempt from federal estate tax (Ohio does not impose a state estate tax either). Given the high dollar amount of the federal threshold, it may be reasonable to assume that many testators may not even have to worry about their estates being taxed.
Even those whose estates are valued at or near the threshold amount may be able to avoid the tax as well. Estate tax portability allows a married couple to combine their exemption amounts to protect up to $22.8 million collectively. A testator would need to gift the entire amount of their estate to their spouse (which would not be taxed due to the marital exemption). The surviving spouse would then need to file an estate tax return claiming portability the same year that their spouse dies.
Per the Internal Revenue Service, a return claiming portability must be filed within nine months of a decedent’s death. Estate representatives can seek a six-month filing extension if it is needed.