Planning for Estate Tax Liability in Greater Philadelphia

At the law firm of Berman & Asbel, our attorneys help families manage future estate tax exposure through careful asset management, protection of your marital exemptions and strategically selected trust instruments that address your practical needs. To learn more about our estate tax planning practice, contact our office in Media.

Despite what you've heard, a living trust won't shelter you from estate tax

While the transfer of assets into a living trust can help you avoid Pennsylvania probate procedures, you won't avoid any federal estate tax liability. Because living trusts hold revocable assets, the IRS effectively ignores them. Only irrevocable trusts that place assets out of the settlor's reach can effectively shelter your estate from tax exposure.

One option that works well for married couples is the estate tax credit bypass trust. This approach to planning for tax liabilities essentially maximizes and extends the value of the marital exemption available to each spouse. A bypass trust minimizes the tax liability that otherwise arises upon the death of a surviving spouse. In 2009, up to $3.5 million can be sheltered from federal taxation through an estate tax credit bypass trust.

Other approaches to managing estate tax exposure involve the use of irrevocable life insurance trusts, charitable remainder trusts, or, especially for families who anticipate that their property will increase in value, a qualified personal residential trust. In any event, our advice about your estate planning options is always tailored to the specific circumstances and objectives of our clients.

Even people of modest means can benefit from estate tax planning

Life insurance proceeds or appreciation of property values can trigger estate tax liabilities even for families who would never think of themselves as wealthy. For many middle-class families, the Pennsylvania inheritance tax can take a big enough bite out of an estate to make tax planning worth your while.

To learn more about your options for avoiding or deferring state and federal tax liabilities, contact an experienced estate planning lawyer at Berman & Asbel in Media.