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Avoiding Estate Taxes

Clearwater estate planning attorneys Gavel and American FlagDue to the fact that estate laws change so frequently, it can be difficult for Clearwater estate planning attorneys to devise an effective estate plan that minimizes the amount of taxes that an estate may be subjected to. In recent history, only those estates that have high values are subject to the federal estate tax. Additionally, estate tax exemptions tend to increase over time to properly account for inflation.

Federal Exemption Rate

Clearwater estate planning attorneys can explain that the federal exemption rate in 2014 was $5.34 million. This means that the value of the estate over this amount is subject to a large estate tax.

State Estate Tax

While some states also impose an estate or inheritance tax, Clearwater estate planning attorneys can explain that Florida does not impose such a tax. State estate taxes tend to have a much lower exemption rate than the federal exemption rate.

Ways to Avoid Estate Tax

If you anticipate that the value of your estate may exceed the federal exemption rate, Clearwater estate planning lawyers may advise you to take advantage of one or more of the following strategies to help reduce your tax liability.

Leave It to Your Spouse

The federal exemption rate excludes those assets that you specifically devise to your spouse. You can leave your entire estate to your spouse tax-free. However, when your spouse dies, his or her estate will be subject to the exemption rate.

Use an Irrevocable Trust

Clearwater estate planning lawyers can explain that revocable trust assets are still used to calculate the total amount of tax due because the settlor still has control of these assets. However, irrevocable trusts function differently because you do not retain control of these assets. The trust becomes the legal owner of the assets. Through an irrevocable trust, you can transfer assets to beneficiaries without incurring taxes, even if their value exceeds the exemption amount.

Use a Different Trust

Additionally, your estate planning lawyer can advise you of other potential trust options. For example, a credit shelter trust can have assets that are equal to the value of the federal exemption rate. If you establish this trust at your death, your spouse can still receive income from these assets like he or she would have if you devised them specifically to your spouse in a will. This strategy can also help you avoid putting your spouse’s estate over the federal exemption limit.

Minimize the Value of Your Estate

Another potential way that you can minimize your tax liability is by decreasing the value of your estate. For example, you can make gifts of up to $14,000 each year without having to pay gift taxes while keeping within the annual exclusion limit. Certain gifts do not count toward the annual exclusion, such as tuition or medical expenses that you pay on behalf of another person.

If you would like to learn about other ways that you can potentially avoid incurring federal estate tax, contact the Coleman Law Firm at 727-461-7474.

Clearwater trust administration attorney

Estate Plan Considerations

Dunedin estate planning attorney working at his deskWhile your Dunedin estate planning attorney can explain that the foundation of any estate plan is to provide a plan for how your property is distributed at your death, he or she can explain that estate plans involve many more principles than this. A Dunedin estate planning lawyer can help you devise a plan in case you become incapacitated and plan for other potential events that can significantly impair your finances. Here are some documents that a Dunedin estate planning lawyer may advise will be part of your estate plan.


When most people think of estate planning, they think of wills. Rather than having the state decide how to dispose of your property, a will lets you make these decisions. However, your Dunedin estate planning lawyer can explain that wills also allow parents to name a guardian for their children. Additionally, you can name an executor to oversee the process.


Another tool that you can add to your estate plan is a trust. Trusts provide for the lawful transfer of property. Trusts can help provide for the management of assets during your life and upon your death. Trust assets are shielded from the probate process. Additionally, you can set parameters around when property should be transferred from the trust to your beneficiaries, unlike with wills.

Power of Attorney

A Dunedin estate planning attorney may recommend that you include a power of attorney as part of your estate plan. This legal relationship allows another person to make financial decisions on your behalf. They can operate while you are ill, when you become incapacitated or both.

Health Care Directives

A health care directive allows you to pre-determine how you want things to proceed when certain situations occur. For example, you can instruct medical providers not to provide you with life-sustaining treatment through the use of a living will. Additionally, you can designate a health care proxy who will have the legal right to make health care decisions on your behalf.

If you would like more information on what you should include in your own estate plan, contact the Coleman Law Firm at 727-461-7474.

Limited and General Financial Power of Attorney Designations

Largo estate planning lawyer signing documentsMany estate plans focus on what will happen after the client dies and virtually ignore what financial arrangements should be made during the client’s lifetime. If you would like to appoint another person to be able to make financial decisions on your behalf, a Largo estate planning lawyer can help establish a power of attorney for you.


A Largo estate planning lawyer may define the following terms:

  • agent or attorney-in-fact – the individual who is given the right to make financial decisions on another person’s behalf
  • principal – the person who is giving the other individual the right to make financial decisions on his or her behalf
  • financial power of attorney – the legal document that provides the powers that the principal gives the agent

As the principal, you can determine which powers you want to give the agent, when you want the person to start having those powers and when you want them to cease having these powers.

Some FPOAs Address Specific Situations

Your Largo estate planning attorney can explain that some financial power of attorney designations are limited in nature. These special power of attorney designations may limit the powers, such as only giving the agent the right to write checks on your behalf or the amount of time that the agent will have these powers. For example, if you inform your Largo estate planning lawyer that you will be out of the country, he or she may recommend that you provide a start and end date for the agent.

Specific Designations

Statutory power of attorney forms usually provide for general powers to be provided to the agent without you having to do much more than initial the page. However, there are certain powers that you may have to specifically list on your power of attorney document. For example, you may have to specifically state that you give your financial power of attorney the right to change your beneficiaries, trusts or will.

Commencement and Termination of Financial Power of Attorneys

A Largo estate planning attorney can explain that there are ways that you can ensure that your financial power of attorney be able to act on your behalf when needed. For example, by making the power of attorney durable in nature, your agent will continue to be able to act as your agent in this capacity even if you become disabled or incapacitated. Additionally, your power of attorney can start taking action immediately. If you are worried only about someone handling your affairs if you are incapacitated, your attorney may recommend that you use a “springing” power of attorney. All power of attorney designations naturally expire at death.

If you would like assistance in establishing your power of attorney, contact the Coleman Law Firm at 727-461-7474.