Estate tax planning is important to many Minnesotans because Minnesota is one of nineteen states that collects a death tax. Unlike the $5.34M threshold for federal estate taxes, Minnesota has a much lower individual exemption (amount you are allowed to pass without incurring tax). During the 2014 legislative session the state legislature passed amendments to Minnesota’s estate tax system. Individuals dying in 2014 are allowed a $1.2M individual exemption.
For larger estates, the tax can be more problematic because the tax rate is progressive (the rate increases from 9% to 16% as the size of the estate increases). As a result, credit shelter trusts which essentially ensure each spouse utilizes their $1.2M individual exemption, can be insufficient to reduce estate tax liability on large estates. JMW attorneys are experienced in the use of family limited partnerships and other corporate vehicles to assist families with large estates preserve their wealth for future generations. These corporate vehicles help families structure a lifetime gifting programs with the goal of reducing the size of the estate by the time of the surviving spouse’s death without incurring gift tax consequences. If you would like help analyzing your estate, big or small, please give us a call for a free consultation: 952-314-4189.