Estate and gift taxes can have a major impact on how much of your wealth gets passed on to your family. Our Annapolis, MD tax lawyer knows that while most people won’t face federal estate tax due to high exemption limits, some still need to plan carefully—especially those with growing assets or family-owned businesses. On the state level, tax thresholds may be much lower. Working with an attorney who has over 40 years of experience can help you manage tax exposure and develop a strategy that reflects your goals.
The Basics Of Estate And Gift Taxes
The federal estate tax applies to the transfer of property at death when the value of the estate exceeds a set exemption amount. For 2025, the federal exemption is set to drop significantly from prior years, meaning more families could be affected in the future. Anything above the exemption is taxed at a rate that can reach 40%.
Gift tax works differently. It applies to property or money given during a person’s lifetime. While there’s an annual exclusion that allows individuals to gift a certain amount to others without reporting it, larger gifts may count against your lifetime exemption.
These rules are often confusing, especially when trying to determine what needs to be reported and how it affects long-term planning.
Why Timing And Strategy Matter
There are ways to reduce the impact of estate and gift taxes, but timing is important. Lifetime gifting strategies can be used to move assets out of your taxable estate while still helping your loved ones now. This could include giving annual gifts to children or grandchildren, funding educational expenses directly to institutions, or setting up certain types of trusts.
Trusts can also help with wealth protection and asset distribution. Depending on your needs, you might consider a grantor trust, charitable trust, or irrevocable life insurance trust. These tools require careful drafting and administration to comply with tax rules, which is where legal guidance becomes valuable.
Business And Property Transfers
For those with family-owned businesses or valuable property, estate and gift tax planning can also include succession planning. It’s not just about minimizing taxes—it’s also about making sure assets transfer smoothly to the next generation. A lawyer can help you structure business interests in a way that supports continuity and keeps tax burdens manageable.
Real estate transfers may also require specific planning, particularly when it comes to vacation homes, rental properties, or land with sentimental or investment value. These assets can trigger tax issues if not handled properly during lifetime gifts or after death.
Working Toward Your Goals
Each family has different priorities. Some want to support charitable causes, while others focus on preserving wealth for children and grandchildren. Whatever your goals, the tax impact is worth considering as part of the overall estate plan. Planning ahead gives you more control over how and when your assets are transferred.
At Crepeau Mourges, we help individuals and families make informed decisions about estate and gift taxation. If you’re looking to protect your assets and reduce unnecessary tax exposure, we’re here to help. Contact us to schedule a free case review and learn how we can support your long-term planning.
