Post-Mortem Planning

Tax Filings and Minimizing Tax Liabilities 

When an individual dies there will be 2 types of taxes due, the estate tax, or more commonly known as the death tax, and the decedent's individual income taxes.

Both types require careful thought and planning to minimize the tax burden. Decisions to be made may include which fiscal year to use, if income should be accelerated, if a trust will be involved, what deductions are needed and which return will they most efficiently be used on.

In preparation of taxes it is also necessary to determine what is the most beneficial valuation date to be used for the valuation of property. Either, the date of death or the alternate valuation date?  Knowing which date is more beneficial can result in a reduction of the overall estate tax creating a significant savings for some estates.

Another strategy that can be utilized for a surviving spouse may be the use of a decedent’s unused exemption from the estate tax through a portability election. Since death is a tax qualifying event, a surviving spouse has the option to elect to use the marital deduction through a disclaimer, if it is determined to be beneficial.

At North Carolina Estate Planning & Fiduciary Law, our knowledgeable attorneys can help employ effective strategies to mitigate exposure to the federal estate tax, fiduciary tax, income taxes, generation-skipping transfer tax and other potential tax liabilities that may arise.

What is a Disclaimer And How to Use it to your Advantage

A disclaimer is an election made by a beneficiary to refuse assets or property they would otherwise receive from a decedent. Once property is disclaimed, it  then passes as if the intended recipient died before the decedent who left them the property.  Generally a disclaimer occurs without any negative consequences, however, when used properly it has the potential to result in positive benefits.

Postmortem Planning through Trusts 

Another way to change the flow of property may be to revise or amend the terms of a trust agreement that no longer works. Often this can be done through non-judicial settlement agreements, and depending on what specific terms are being revised, it may or may not require judicial approval or other consents.

In addition another effective method of post-mortem planning with trust agreements is done through decanting. Decanting is simply transferring assets from one undesirable trust to another more beneficial trust. However, in order to decant assets from trust to trust, certain requirements must first be met.

At North Carolina Estate Planning & Fiduciary Law, our attorneys help individuals, fiduciaries or anyone else faced with administering a decedent’s estate or trust navigate through the intricacies involved in order to effectively maximize the potential savings and create a beneficial outcome.

f you need assistance in planning for post-mortem elections and decisions, or help in administering an estate, our attorneys offer a full spectrum of legal services surrounding estate planning, including estate and trust administration. We understand the ever changing nature of both tax and legal issues that can have a significant impact on estate planning and can assist you in overcoming obstacles to help you maximize savings for your loved ones. For guidance on effective planning options available, contact us for a confidential consultation at 704-248-6325 or complete our online form here.