Estate tax planning in Minnesota is crucial to preserve your wealth and leave a lasting legacy for your loved ones. Through legally strategic efforts, you can maximize the inheritance you leave behind for your loved ones. That way, you can determine how you and the people closest to you can utilize and benefit from what you have worked hard to build.
A closer look at Minnesota estate taxes
In the Land of 10,000 Lakes, estates exceeding a particular value are subject to tax. As of 2023, the estate tax exemption in Minnesota is $3 million. That means only estates above this amount are subject to taxation. Depending on the estate’s value, tax rates can range from 13% to 16%. Estate tax exemption amounts remain steady for now. However, it’s crucial to stay informed about potential changes in the future. Doing so can help you prepare adequately.
How you can minimize taxes on your estate
A few things you can do include:
- Taking advantage of annual gift tax exemptions: This can allow you to gift up to $17,000 per recipient annually without incurring taxes. Lifetime gift tax exemptions can also further reduce your taxable estate.
- Establishing a trust: An irrevocable, bypass, or charitable trust can help manage and reduce your taxable estate. Irrevocable trusts can remove assets from your estate. In contrast, bypass trusts can provide for a surviving spouse without increasing their taxable estate. Charitable trusts can allow you to remove assets from your estate, which can help you reduce both state and federal estate taxes.
- Business succession planning: If you own a business, transferring ownership interests through strategic planning can minimize tax liabilities and help facilitate a smooth transition to the next owner.
These are just a few examples of what you can do. There may be other things for you to consider based on your circumstances.
You deserve to keep what you have worked for
Effective estate tax planning in Minnesota is essential for preserving wealth for future generations. Minimizing taxes can protect your legacy and keep your assets within your family. A seasoned estate planning professional in Minnesota can help you make appropriate decisions based on your unique situation.