Vanni Foundation >

Nesso Tax Offers Estate Tax Preparation in Plantsville, CT

When you think of how you’ll leave your estate behind, there are a lot of factors to consider. Estate taxes, while often overlooked, are an important one. If your estate’s value exceeds a specific amount, this tax could take a considerable portion away from your beneficiaries. That’s why educating yourself about this topic and taking proper steps to plan your estate is essential. Fortunately, there’s help available. At Nesso Tax, we offer estate tax preparation services tailored to your unique needs. Our tax professionals in Plantsville, CT, have the experience and expertise to guide you through this complex process.

Offers Estate Tax Preparation in Plantsville, CT

An Overview of Estate Taxes

When a person dies, their estate is subject to taxation, commonly called estate taxes. This tax is levied on the transfer of assets from the deceased to their heirs and beneficiaries. The federal and many state governments impose an estate tax. However, most estates are free from these taxes due to exemptions and other deductions available. In addition to the federal estate tax, some states also levy an inheritance tax based on the value of any property left behind by the deceased. The latter is much less common (Connecticut doesn’t have an inheritance tax), and the beneficiaries, not the estate, are responsible for paying it.

For tax purposes, the fair market value of all assets owned at the time of death is the basis for calculating an estate’s value. Not the amount that the deceased paid for them. While that means that any appreciation in the estate’s assets over time will be subject to tax, it also protects against being taxed on peak values that have since dropped. For instance, if the estate includes a home purchased for $200,000 that subsequently appreciates to $250,000, but the fair market value at the time of death is $220,000, only that last value will be taxed.

A deceased’s estate may include, but isn’t limited to, the following assets:

  • Real property such as land and homes.
  • Personal property like vehicles, furniture, artwork, jewelry, and collectibles.
  • Financial accounts like checking or savings accounts.
  • Retirement accounts like IRAs or 401ks.
  • Stocks or bonds held in a brokerage account.
  • Business interests assets.
  • Insurance policies, including life insurance.

What’s Left Out of the Final Calculation?

Any property the deceased left to a surviving spouse isn’t counted toward the estate’s value and, therefore, is exempt from taxation. The unlimited marital deduction is the right to transfer assets between spouses without incurring taxes. When the surviving spouse who inherits the assets passes away, the estate’s beneficiaries will be responsible for any applicable taxes. It’s important to note that heirs may decline an inheritance to avoid paying taxes or managing certain assets. Other common exemptions include any charitable donations made by the deceased or debts/fees owed.

Federal Estate Tax Rates

For 2023, the IRS requires estates with combined gross assets and prior taxable gifts exceeding $12.92 million to file a federal estate tax return and any applicable taxes. This figure is called the lifetime exclusion amount, which adjusts annually for inflation. Estates valued below this amount are exempt from federal estate taxes. The estate tax rate ranges from 18% to 40% for those above it, depending on the total value. Several deductions and credits can also help lower the final tax liability.

State Estate Tax Rates

In previous years, the Connecticut estate tax was progressive, meaning the higher your estate’s value, the higher your tax rate. However, in 2023, the estate exemption amount increased to match the federal exemption of $12.92 million. As a result, if you’re a Connecticut resident whose estate value exceeds this amount, you’ll owe both federal and state estate taxes. The tax rate also changed to a flat 12% on the total estate over $12.92 million. Keep in mind that the federal exemption is portable, meaning married couples can double the amount if they plan and file correctly. That isn’t the case with the Connecticut exemption.

About Estate Planning

Estate planning is deciding and documenting how an individual’s estate should be managed and distributed in case of death or incapacitation. It involves a careful review of the individual’s assets and liabilities, as well as any tax regulations that may apply. It also includes making arrangements for their dependents and beneficiaries. Estate planning isn’t just for the wealthy; it’s crucial for anyone with assets they’d like to pass on to their loved ones.

Here are some of the fundamental tasks of estate planning:

  • Making a will specifies how you want your assets divided and who will be responsible for their distribution.
  • Creating trusts that can help minimize taxes and protect assets for heirs.
  • Naming a guardian for your minor children.
  • Identifying beneficiaries for your retirement accounts and life insurance policies.
  • Organizing health care and financial powers of attorney so someone else can decide for you if needed.

As you can see, creating a comprehensive estate plan can be complex. Many of these steps can ensure that your wishes are fulfilled and that your loved ones are cared for, but they require careful consideration. Next, we’ll explore how you can use estate planning to save money on taxes.

Understanding Estate Planning and Its Connection to Taxes

When you pass away, estate planning can help reduce or even eliminate taxes on your assets. You can achieve this through careful structuring of your estate. Depending on its size and complexity, there may be several ways to minimize taxes, such as charitable giving, gifting, and trusts. You can also use certain deductions to reduce your tax liability. Our professional estate planners at Nesso Tax can educate you on these strategies and how they benefit you and your heirs. 

  • A-B Trusts: A key tool used to minimize estate taxes is the marital deduction trust, also known as an A-B Trust. It’s a way married couples can transfer assets between each other without incurring the federal estate tax.
  • Education Funding Strategies: Certain vehicles, such as 529 plans and Coverdell accounts, can be a great way to save for your children’s college education. You can control how much money is accessible and when it’s available while also gaining tax advantages.
  • Cutting Tax Effects of Charitable Contributions: Charitable contributions can reduce taxes for high-income earners. By comprehending the tax implications of giving, you can maximize your donations and minimize their effect on your estate tax bill.
  • Estate Freezing: An estate freeze allows you to transfer your assets while lowering their taxable value and shifting gains to the next generation. Our financial planners can help you decide if this strategy suits you.

How Nesso Tax Professionals Can Help with Estate Tax Preparation in Plantsville, CT

We at Nesso Tax understand that estate taxes can be complex. We work closely with our clients to navigate the current state and federal estate tax laws and how they apply to their circumstances. Our team is well-versed in all these tax matters and estate planning documents, and they’re here to advise you on the best action course. We’ll review your financial situation and recommend the most tax-efficient strategies available. 

When you first reach out to us, we’ll arrange an initial consultation where you can discuss your needs. One of our financial advisors in Plantsville will review the options and determine which ones are best for you. From there, we’ll create a detailed plan that caters to your wishes and helps reduce or eliminate estate tax liabilities. Remember that we’re always available to answer your questions or adjust the plan if your situation changes.

Benefits of Estate Tax Preparation

The most obvious benefit of estate tax preparation is that it can save you money on taxes. But it offers more than that. Here are some of the other advantages:

  • Protection for Loved Ones: Estate taxes can significantly impact your inheritance. By preparing for them early, you can minimize the burden on your heirs and guarantee they receive their intended estate share.
  • Confidence: Knowing your estate is in order can provide peace of mind and eliminate uncertainty when passing down assets. You’ll know that you’ve taken the necessary steps to prepare your loved ones for the future.
  • Saving Time: A well-thought-out estate plan can save time and make the process easier for your family. They won’t have to worry about figuring out the many details associated with estate taxes.

Why Choose the Nesso Group

Our Long-Term Vision

At the Nesso Group, we aim to provide long-term financial strategies for our clients. We don’t just support your wealth today but also assist you in securing it for the future. You can count on us to be there when it matters.

Our Holistic Approach to Your Taxes and Estate Planning

Our financial planners in Plantsville take a holistic approach when handling estate tax matters. We understand that taxes are only one part of the larger picture. Therefore, we consider the full scope of your situation, including investments, retirement planning, debt management, and more.

Our Defined Goals

  • Guiding your financial health and strategies
  • Helping you achieve tax efficiency
  • Helping you grow your wealth in a sustainable way

Start Planning Your Estate Taxes Today

If you’re ready to take control of your estate taxes, contact the Nesso Group. We offer superior estate tax preparation services in Plantsville, CT, to help you create a comprehensive, tax-efficient plan. Our financial advisors can walk you through the process, answer any questions and ensure everything is in order. We’re committed to helping you secure your legacy and set up your loved ones for success. Reach out today to get started.

Call Now Button