A formula clause splits the deceased person’s property between their estate and a trust using a simple formula to take advantage of the lifetime estate and gift tax credit. Formula clauses can work well when used in estate plans when property or another asset with an uncertain or changing value is transferred by a gift transfer. Formula gift clauses can limit estate or gift taxes to be paid out of the estate, or by your heirs.
In 2022, the value of an asset that can be transferred free of estate and gift taxes is now $12.06 million per individual, up from $11.7 million in 2021. Anything valued above that amount may be taxed at 30% or more of the value.
An experienced estate planning attorney can advise you on the best way to add a formula clause to your estate plan to protect your heirs and their inheritance.
Do You Need to Talk to An Oak Brook Estate Planning Attorney?
Planning ahead will provide you with peace of mind today and your loved ones with protection in the future. Families are complicated, and so are estate plans. Each one is different. Talk to the experienced estate planning attorneys at the Estate and Probate Legal Group about how to prepare for today and tomorrow. Call us today at 630-864-5835.
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