Preparing Your Client’s Estate Taxes Ahead of Tax Season


By: HeirSearch.

As a trust and estate administrator or attorney, tax season can be stressful for both you and your clients. And whether you’re in the midst of estate planning for a client or managing a decedent’s estate taxes, staying tuned into the constantly evolving laws and regulations is essential to fulfilling your fiduciary duty.

In this blog post, we’ll cover key points to remember as the legal community and their clients prepare for tax season.

Keeping Up With Evolving Tax Laws and Processes

When preparing your client’s estate taxes, staying tuned into the latest tax laws and regulations is essential to maximize the estate’s value.

As you likely know, for example, the estate and gift tax exemption amounts have changed for the 2023 tax year. Per a recent Forbes article, the federal estate and gift tax exemption has increased to $12.06 million per person, up from $11.7 million in 2022.

These changes can have material impacts on your client’s estate planning philosophy. It’s essential to watch for changing policies affecting your client’s estate taxes and adjust your strategies accordingly.

Understanding the estate tax planning process’s inner workings and subtle nuances is also key. For example, it’s important to remember that the estate tax return is due nine months after a decedent’s death, but extensions may be available in extenuating circumstances.

Additionally, because taxes are calculated based on the estate’s overall value—including assets such as real estate, investments, and personal property—having a comprehensive picture of your client’s total estate assets will help you plan and prepare more effectively to maximize its value.

Plan Ahead to Minimize Estate Taxes

Speaking of planning, another way to help your clients minimize their estate taxes is to maintain a pragmatic but forward-looking perspective. A January 2023 article recommends leveraging strategies such as gifting, trusts, and life insurance to reduce an estate’s size and overall tax burden while maximizing its value.

By starting early and harnessing these strategies in accordance with your client’s wishes, you can help them maximize their assets and minimize their tax liability.

In addition to federal taxes, it’s crucial to consider state-specific estate tax laws. Many states have their own unique estate and inheritance taxes, often allowing for distinct exemptions and rates versus federal taxes. Understanding these state-specific regulations and how they impact your client’s estate will help you plan more effectively and avoid surprises.

Finally, seeking professional guidance when preparing your client’s estate taxes is always recommended. A recently published guide to estate tax planning suggests that legal professionals should seek a tax professional’s help navigating complex laws and regulations. Through this, you can ensure your clients take advantage of all available tax-saving strategies and avoid potential pitfalls.

HeirSearch is Here to Help

Preparing your client’s estate taxes ahead of tax season requires staying up-to-date with the latest tax laws and regulations, understanding the estate tax process, planning, considering state-specific tax laws, and seeking professional guidance. By following this framework for success, you will help your clients maximize their assets and minimize their tax liability.

With tax season swiftly approaching, we hope this breakdown has been a valuable reminder of methods to optimize your tax and estate planning duties. We always strive to deliver practical resources that empower legal professionals to fulfill their fiduciary duties confidently.

And to that end, if you’re facing the challenge of locating a missing heir or beneficiary in an estate or trust matter, HeirSearch can help.

HeirSearch’s professional researchers identify and locate missing or unknown beneficiaries and heirs for probate and trust termination. We work exclusively with executors, administrators, trustees, fiduciaries, bank and trust officers, and their counsel to establish kinship and identify shareholders for legal purposes.

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