After passing away in Louisiana, your estate is distributed among your beneficiaries based on the terms of your will after going through a probate process. This process comes at a cost; for example, you will have to pay fees for the probate process, your trustee, and on top of that, the federal estate tax, which can be significantly high. Therefore, let us look at how you can plan your estate to not be taxed so much.
Louisiana estate planning laws
Generally, Louisiana law considers all personal property, businesses, and real estate as estate property. If you don’t have a will, the court will divide your property in a way they see fit, which can be problematic for your beneficiaries. However, if you have a valid will, the court will respect your wishes and disburse it according to your terms.
Estate planning and taxes involved
When planning your estate, Louisiana law requires you to name your succession representative. This person will manage and protect your property after you die. They will ensure that all your debts are settled and your taxes paid before distributing what’s left to your beneficiaries.
It is important to minimize or completely avoid the significantly high federal estate tax so that your beneficiaries can remain with something substantial. You can achieve this with proper estate planning. It would help if you worked closely with a professional and an attorney to guide you through this process.
How to avoid estate tax
• Since life insurance isn’t taxable, set up an irrevocable life insurance trust for your loved ones. The earlier you do this, the better.
• Transfer some of your assets while you are still alive. For example, you can gift up to $11.7 million to your beneficiaries before you hit the gift tax cap.
• Give out charitable donations through a trust. You could get a tax break when transferring your property to your beneficiaries.
• Make your family members limited partners in your company. Of course, you will still be the shot caller, but your family members will have stakes in your company.
Protect your family members from extremely high federal estate tax. You can do this by trying out the few options given above.