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Planning to avoid estate taxes

Some in Roswell might worry that after having expended a great deal of effort and attention into preparing their estates to be dispersed to their beneficiaries, much of the assets they have to leave will be eaten up by taxes. These fears may be unwarranted, as a great of misinformation exists about estate taxes. First and foremost is the fact that not many estate will actually owe taxes. Per The American College of Trust and Estate Counsel, New Mexico does not have an estate tax. That leaves one only having to worry about the federal estate tax, and even that is one that can be planned for. 

An estate tax threshold has been set that regulates which estates will be subject to tax. Forbes Magazine shows that the threshold for 2019 will be $11.4 million. Thus, any estate whose taxable value is lower than that will not be taxed, allowing its beneficiaries to receive their assets without the worry of having to settle any tax liabilities. 

One should be careful in planning how their assets are dispersed, however, as doing so without giving any thought to the estate tax could push a beneficiary above the threshold. If one leaves an amount to their spouse that (combined with the value of that spouse's estate) exceeds the threshold amount, the spouse's estate will be taxed. This can be avoided, however, by claiming portability (or the unused portion of a deceased spouse's estate tax exemption amount). This is done by simply filing an estate tax return the same year that the deceased spouse dies stating the intention to claim portability. By so doing, a married couple can combine their exemption amounts and project up to $22.8 million from being taxed. 

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701 West Country Club Road
Roswell, NM 88201

Toll Free: 866-755-7229
Phone: 575-578-4392
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4801 Lang NE
Suite 110
Albuquerque, NM 87109

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Phone: 505-798-2588
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732 E. Michigan
Suite 500
Hobbs, NM 88240

Toll Free: 866-755-7229
Phone: 575-318-2887
Fax: 575-393-0565
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1990 E Lohman Ave
Las Cruces, NM 88001

Phone: 575-222-1111
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1100 Sudderth Dr
Ruidoso, NM 88345

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