Inheritances and gifts are timeless ways to ensure your loved ones remain financially secure. Protect your wealth, preserve your assets, and minimize the burden of taxes that could affect your or your loved one’s financial standing with proper tax planning solutions. 

At Wiles Law, we guide our clients through the hoops and hurdles of distributing your estate and gifts to your family and dear friends. Our attorneys can offer personalized solutions to transfer gifts while minimizing the tax and transfer obligations. Let us help you navigate estate and gift tax in Charleston, South Carolina.

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What Is Tax Planning?

Tax planning involves strategically managing a person’s finances to minimize how much taxes they must pay. Using tax deductions, exemptions, tax filing statuses, investments, and other vehicles, you could legally reduce the taxes you’re obligated to pay and maximize your savings. These savings can be used to meet long-term objectives, such as building wealth for retirement, minimizing debt and tax deductions from the estate, and minimizing gift tax paid when transferring assets.

Tax Planning for Estate Taxes

No one likes to think about passing, but it’s crucial to consider what you’re leaving behind for your loved ones. You may have the assets to keep them financially secure and the will for your executors to follow. However, on top of your debts, the estate taxes could cost your heirs thousands or even millions. Through attorneys with extensive knowledge and experience in South Carolina laws on estate tax, you can establish a strategic plan to secure your family’s generational wealth.

What Is Estate Tax?

This is the state and federal tax applied to an estate after an individual passes away. Following a person’s death, an estate executor distributes the assets to their designated heirs and beneficiaries after all debts and taxes have been settled.

Does South Carolina Have Estate Tax?

South Carolina doesn’t impose estate tax, but your assets may still be subject to federal estate tax. Minus any qualified exemptions, the larger your estate is, the larger the estate tax rate will be for your heirs and beneficiaries.

How Can I Reduce Estate Tax?

Your estate may be exempted from estate tax depending on your investments, financial situation, and the circumstances following your death. For example, if your surviving spouse inherits your estate, they aren’t required to pay taxes. Additionally, the following strategies can be used to minimize estate taxes:

  • Setting Up Trust Funds
  • Intentionally Defective Grantor Trusts
  • Life Insurance Policies

Our firm understands the various strategies and vehicles applicable to your circumstances. We can help you establish trusts and find applicable exemptions to use on your estate. With Wiles Law, you can give your surviving loved ones the gift of financial security when they need it most. 

Tax Planning for Gift Tax

Gift-giving to loved ones gives many people a rewarding sense of generosity. However, for gifts that meet a certain value threshold, your spreading joy may result in a hefty tax burden for yourself or your loved ones. By choosing to protect yourself by planning for gift tax in Charleston, SC, you can make the practical decision that ensures your gifts don’t come with strings attached. Our experienced attorneys can guide you through the nuances of gift tax in Charleston and provide financial foresight.

How Can I Reduce Estate Tax?

Gift tax is imposed when one person gives a gift to another person without receiving anything in return. The gift can be in the form of money, real estate, stocks, or any valuable assets or properties. A gift tax is imposed when the value of the object you give exceeds a certain amount. This prevents people from evading estate and inheritance taxes by gifting their assets before passing. 

The giver typically shoulders gift tax. Unless the recipient offers to pay on your behalf, you’re liable to pay gift tax on top of your gift.

Does South Carolina Have a Gift Tax?

There is no SC law on gift tax. However, while you don’t need to consider SC gift tax, federal gift tax laws may apply to applicable gifts. The federal gift tax limit changes every year. Exceeding that limit requires you to pay a gift tax rate ranging from 18% to 40%, depending on the taxable amount. 

Gift tax applies to one-time gifts that exceed the state and federal threshold. It also applies to the accumulated value of gifts given throughout your lifetime. This means that even if you transfer a gift under the yearly threshold, you may still be liable for gift tax. If you give more than the annual gift tax limit, you may be required to file a gift tax return.

How Do I Plan for Gift Tax?

There are some exceptions and special rules for calculating how much you owe in gift taxes. 709 Gift Tax Returns, for example, can be filed by donors to report taxable gifts made during a year and to allocate lifetime exemption amounts. 

There are plenty of ways to use the annual and lifetime gift tax exclusion to your advantage, especially when qualified attorneys can guide you through the tax planning process. At Wiles Law, we can help you prepare your 709 Gift Tax Returns and maximize your exclusions to minimize the taxes imposed on your charitable gifts.

Why Do I Need Estate and Gift Tax Planning?

Wealth Preservation

Estate and gift tax planning help can help you and your family protect your wealth or transfer generational wealth by minimizing tax liability. Less of your wealth goes to taxes and ensures more goes to your family and loved ones for future generations.

Control Asset Distribution

Through estate planning, people can specify how their assets are distributed among heirs, charities, and other beneficiaries, ultimately ensuring that their wishes are carried out. Executors can follow the plan to resolve debts and taxes, leaving the bulk to your designated heirs and beneficiaries.

Maximize Available Exemptions

There are several tax exemptions for estates and gifts that you may not be aware of or apply to your tax returns. Our attorneys can navigate the complex tax system and use applicable exemptions for a personalized tax-minimizing solution.

Optimize Charitable Efforts

Estate and gift tax planning allows you to support charities, organizations, and other noble causes close to your heart. You can maximize your gifts and reduce the additional cost of your charitable efforts through exemptions and other tax-advantaged strategies.

Succession Planning

For business owners, estate planning is essential in designing a seamless and tax-efficient transfer of ownership to your surviving family or your designated successor. Whatever your plans are for your business, our efforts can assist with a smooth transition.

Avoid Probate

Proper estate planning can help reduce the time and expense associated with probate, a court-supervised process of distributing assets after an individual's death. With your trusts and other assets accounted for, you can minimize the hurdles your surviving loved ones have to undergo.

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Transfer Your Assets To Those Important To You With Wiles Law

Wiles Law is your trusted full-service law firm for estate, tax, and business planning. Preserve your wealth and leave your legacy intact for those who matter most through careful, strategic, and experienced planning solutions. 

Contact Wiles Law today to schedule your free consultation.

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