What Are Estate and Trust Taxes?

Estate taxes are taxes that the federal government charges when someone passes away. These taxes primarily depend on the deceased’s assets and the heirs’ shares of those assets. Before levying an estate tax, the government subtracts debts, funeral expenses, mortgages, and liens. The government will then charge federal taxes on some of the remaining assets.

Planning for the future allows individuals to organize their assets and ensure that their estate is structured most beneficially. If the individual dies without an estate plan, the government will levy taxes on the entire estate. The heirs must liquidate the assets and pay taxes on those proceeds. Using a trust, you can transfer property or money to your family while alive.

Understanding Trusts

A trust is a legal arrangement where a person or organization holds and manages assets on behalf of a beneficiary. This arrangement aims to keep property out of your estate and out of probate court so that it won’t be subject to probate fees, taxes, and delays. Trusts are popular estate planning tools because they allow an individual to bypass probate courts and use a trust agreement to pass assets on to the beneficiaries.

While trusts have so many benefits, they require more attention than many people like. For them to be effective, they must be well-drafted. Otherwise, they can be subject to tax and legal issues, which could mean the beneficiaries don’t get the total value of what you intended them to have.

Benefits of Establishing a Trust and Other Estate Planning Documents

Whether you’re trying to protect your assets or plan for your family’s future, there are many benefits to establishing a trust or other estate planning documents. Here are a few of them:

Estate Planning Allows You to Save Money on Taxes

An estate plan can reduce your taxable estate and save your heirs lots of taxes. Connecticut limits the amount an heir can inherit from your estate to $1.3 million, often called the “tax cap.” The taxable estate decreases if you establish a trust, which transfers income and principal assets to beneficiaries so that they don’t pay taxes on their income sources. It also gives them some protection by entitling your heirs to certain exemptions.

An Estate Plan Eliminates Family Messes

Estate planning allows families to have their own financial and legal documents customized for them. These documents relieve them of concerns about whether a will’s draft is adequate or whether the transfer of income and principal assets is correct. An estate plan will enable you to choose who controls assets and property, who can access money, and how they will administer things. It helps distribute the assets in the manner you want and protect them from creditors.

Estate Planning Allows You to Create a Legacy

You can create trusts and other financial instruments to provide income, heirs, and charity organizations with a percentage of the assets. You can also give family members money for educational purposes or to start a business. A trust allows you to choose specific organizations and people who will benefit from the estate, providing them with lifelong support. An experienced financial advisor can be an excellent resource for planning your estate.

How Nesso Tax Can Help You Plan Your Estate and Trust Taxes

There’s a lot to track regarding estate and trust taxes. Let Nesso Tax’s collaborative approach to estate planning reduce the stress and confusion associated with managing a trust. Our financial advisors in Plantsville are here to provide comprehensive support and ensure all IRS regulations are met precisely. 

We offer the following services:

• Estate Planning
• Estate Income Tax
• Trust Income Tax
• Gift Tax

Estate Planning and Benefits

Are you trying to build a long-term plan to reduce your loved ones’ tax burden and maximize the value of your estate? Nesso Tax can help create an estate plan that aligns with your values and objectives. We’ll establish an effective strategy that preserves your assets for many years. Our priority is to fulfill wishes while reducing unwanted taxation on relatives involved with the estate/trust.

Our estate planning services encompass the following:

• Wills
• Durable Power of Attorney
• Advanced Directives

Estate Income Tax

Forms 1041, 1041-QFT, and 706 are the three primary forms for estate income tax. They cover various aspects of late estate taxes, such as capital gains, expenses, distributions, donations, and more. Don’t let these forms overwhelm you. Take advantage of Nesso Tax’s services in this complex area of taxation and allow us to help you successfully file your return on time. Our specialists will provide personalized guidance throughout the process and guarantee everything is filed correctly.

Trust Income Tax

We understand that filing trust taxes can be difficult and tedious. At Nesso Tax, we’ll provide comprehensive tax advice, so you don’t have to worry about missing any crucial steps. Our team of professionals will review the situation with you before diving into the details of filing your return, ensuring we’re on the same page regarding what’s best for your trust.

Gift Tax

Gift taxation is a complicated process, but you must be familiar with it if you’re planning on giving away assets. Nesso Tax can educate you on the various factors involved, such as annual exclusions, reporting requirements, and more. Let us do the work while you focus on more significant matters.

Why Choose Our Financial Services in Plantsville

When you decide to work with us, you’re choosing an experienced and knowledgeable team about estate and trust taxes. With Nesso Tax, you’ll get the following benefits:

• A holistic view of your taxes
• Financial guidance on your financial health & strategies
• Help on achieving tax efficiency and minimizing your taxes
• Long-term relationships where you receive tailored solutions
• Assistance to protect you, your family, and your business from financial risks

We’re also part of the Nesso Group, a Connecticut full-service financial and insurance firm. Our solutions include taxes, accounting, wealth management, insurance, and more. Regardless of your needs, you can be confident you’ll receive the highest quality service. We have a track record of success and satisfied customers to prove it.

The Nesso Group Values

Our company bases its decisions on the following core values:

• Integrity: We are honest and ethical in all of our dealings.
• Honesty: We strive to be transparent, honest, and ethical in all our endeavors.
• Teamwork: We collaborate and respect everyone’s contributions.
• Quality: We’re dedicated to providing quality services and solutions with lasting value.
• Client-Oriented: We exist to serve our clients. Their satisfaction is our number one priority.
• Respect: We treat others how we want to be treated; this includes our clients, employees, and vendors.
• Innovation: We strive to stay on top of industry trends and continually improve our processes to be the best in our field.

How Our Process Works

The process of engaging with the Nesso Group is easier than you think. All it takes is:

• Connect With Us: After you fill out the contact form, one of our representatives will contact you to discuss your situation.
• Review And Assess: Our team will listen to your goals, review your estate and trust documents, and assess the details of your tax situation. This step is crucial for us to give you the best advice.
• Develop And Execute: Once we understand your needs, our team will develop an individualized plan and present it to you to guarantee everything is clear.
• Implementation And Follow-Up Support: Our team will help you with the implementation process and provide follow-up support to answer any questions. If your situation changes, our team will also be available to adjust your plan accordingly.

Elevate Your Tax Experience with Nesso Tax

At Nesso Tax, we proudly provide estate planning services in Plantsville, CT. We understand the importance of having a solid plan to protect your legacy, so we’ll create a solution that meets your needs. Our tax advisors in Plantsville will be available every step of the way, from answering questions to filing the return and guaranteeing everything is correct.

We look forward to working with you and helping you elevate your tax experience. With Nesso Tax, filing trust taxes has never been easier. Let us take care of the details while you focus on what matters to you. Contact us today to get started!