Louisiana Estate Tax: All You Need to Know

When an individual dies in Louisiana, their estate can be subject to the laws of succession, often referred to as probate in other states. This is the legal process of transferring all debts, assets, and property to beneficiaries or heirs after an individual has passed away. It is important to keep in mind that, whether your loved one has passed in Baton Rouge, New Orleans, or Port Allen, Louisiana estate tax can come into play in these situations.

Understanding Estate Taxes in Louisiana and the US

In the United States, the estate tax, otherwise called the “death tax,” refers to the tax applied to an estate after an individual passes away. This tax comes into play before any money, assets, or forms of property have been passed to the heirs named in the estate plan, such as those named in a last will and testament. Typically, estates that are valued at a certain monetary amount are subject to this tax.

However, in Louisiana, there is no state-level estate tax, making it one of 38 other similar states. However, depending on the size of your estate, the federal government can impose certain taxes. Typically, if an estate generates more than $600 in annual gross income, that estate will need to file a US income tax return for estates and trusts. This can severely impact the assets your beneficiaries can receive after your death if not properly planned for.

At Field Law, we understand that the last thing you want to think about after the loss of a loved one is the taxes you might be on the hook for. For that reason, it is important to speak with your loved one about how they have structured their estate in regard to potential taxes. An attorney from Field Law can help them implement certain strategies that can help reduce possible tax implications.

How to Reduce Estate Taxes

If your estate generates a certain amount of income every year or is valued at a certain monetary amount, it could be held liable for federal estate taxes. In these cases, your attorney can help mitigate these tax implications by implementing certain strategies. These strategies can include:

• Gifting. There are ways of gifting an inheritance without having to face estate or gift taxes.
• Establishing a trust. When you create a trust, the property and assets held by that trust can typically bypass the succession process, allowing them to also bypass any taxes that would be otherwise imposed. The most protection is afforded by an irrevocable trust, meaning a trust that cannot be changed, altered, or revoked.
• Family limited partnerships. If there is a family-owned business involved in your estate, this strategy might prove beneficial. A family limited partnership can help ensure that income taxes are minimized, the ownership of the business is continued by named members of the family, and liability is limited for family partners.

Comprehensive estate planning is a proven way to protect what matters most to you: your loved ones and everything you have worked so hard to build during your lifetime. Don’t let taxes get in the way of your beneficiaries’ inheritance. Effective planning requires an attorney’s assistance, and the team at Field Law is here to support you.

About Field Law: Experienced Louisiana Estate Planning Attorney

For over a decade, Field Law has been helping Louisiana residents from our offices in Baton Rouge. We understand that no one wants to think about what the end of their life might look like, which is why we are here to meet you wherever you’re at with the compassionate, empathetic legal care you deserve. Let us work to protect you and your loved ones so that you can focus on building meaningful connections that will last generations.

FAQs

Q: Should I Create a Trust in Louisiana?

A: Whether you should create a trust is something you should discuss with a trust lawyer. Creating a trust in Louisiana can have several benefits, including when it comes to certain tax implications that can impact your estate. However, only around 13% of individuals living in the United States utilize these essential estate planning tools. Trusts can be used as a way to bypass the succession process in Louisiana and help reduce the estate’s overall taxable value.

Q: Does Louisiana Have an Inheritance Tax?

A: No, Louisiana does not impose an inheritance tax. An inheritance tax is a tax that heirs of an estate pay when they receive their inheritance, or assets, from the estate of the deceased individual. Unlike with estate taxes, the beneficiary pays the tax, not the estate. Inheritance taxes for individuals from other states can be tricky, and it is a good idea to speak with an estate planning lawyer.

Q: Why Should I Hire an Estate Planning Lawyer?

A: There are several reasons why you should hire an estate planning lawyer, especially when hoping to minimize any tax implications that might affect your estate. Your attorney is here to review all aspects of your estate and implement certain strategies to ensure your heirs receive the maximum amount of your estate available to them, minimizing any taxes or creditors.

Q: How Much Does It Cost to Hire an Estate Planning Lawyer?

A: It can be difficult to offer an exact number as to how much it costs to hire an estate planning lawyer in Louisiana. Each lawyer is different and structures their fees accordingly. Typically, the more complex the estate and the higher its overall value, the more costs might be involved when hiring an attorney.

Hire an Estate Planning Lawyer From Field Law Today

If you are considering how to plan for the future of your estate, you need to hire an estate planning lawyer who can help ensure your heirs receive the maximum amount possible. At Field Law, our lawyers are here to help you create estate planning documents that work to minimize possible tax implications to protect your loved ones following your death. Contact our offices today to learn more and schedule a free consultation.