December 3, 2025

How Estate Tax Planning Protects Your Legacy — and Why Expertise Matters

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When a loved one passes away, navigating the legal and logistical details of their estate can feel overwhelming. One of the most confusing—and often overlooked—aspects is the estate tax. If not planned for properly, estate taxes can diminish the value of your estate, delay distributions, and create unnecessary stress for your heirs.

Whether you're preparing your own estate or managing someone else's, understanding how estate tax works is essential. But just as important is knowing when and how to get expert help. In this article, we'll break down what estate tax involves, why proactive planning matters, and how Presti & Naegele's estate tax services can simplify the entire process.

What Is Estate Tax — And What Assets Count

Estate tax is a federal tax on the total value of a person’s assets at the time of their death. This value, often referred to as the gross estate, includes more than just cash and real estate. Assets subject to estate tax typically include:

Homes, vacation properties, and land
Investment accounts (stocks, bonds, mutual funds)
Business interests or private company shares
Retirement accounts (such as 401(k)s and IRAs)
Personal property (jewelry, vehicles, collectibles)
Life insurance proceeds (in certain cases)

The estate’s value is determined by calculating the fair market value of all assets at the time of death. It’s important to note that this process isn’t always straightforward—valuation can become complicated, especially when real estate, closely held businesses, or unusual assets are involved.

That’s where working with an experienced team like Presti & Naegele becomes essential. Valuation accuracy and proper documentation can significantly affect the outcome of an estate’s tax obligations.

Why Estate Tax Planning Shouldn’t Wait

Many individuals delay estate tax planning because they assume it only matters after death. But waiting until that moment often leaves family members scrambling to organize paperwork, value assets, and file complex returns—often under time pressure and emotional strain.

Here’s why proactive estate tax planning is so important:

Reduces the taxable value of your estate by allowing you to take advantage of deductions and exemptions while you're alive.
Provides clarity to your heirs and executors, avoiding disputes and confusion later on.
Minimizes the chances of missed deadlines or filing errors that could result in penalties or increased tax liability.

Planning ahead offers far more flexibility and control. It allows you to implement strategies—such as charitable contributions or lifetime gifting—that can lower the overall estate value subject to tax.

Presti & Naegele works with individuals and families to ensure that estate tax strategies are integrated early and updated as needed.

Common Mistakes Executors and Families Make

Managing an estate is no small task. Without expert guidance, it’s easy to make costly errors. Some of the most common mistakes include:

Overlooking less obvious assets, like digital assets, royalties, or property in other states.
Misunderstanding deductions and exemptions, which can result in overpaying tax or missing opportunities to reduce liability.
Filing estate tax returns late, which can trigger IRS penalties.
Confusing estate tax with inheritance tax, which leads to poor planning.

Each estate is unique. Some estates may seem straightforward but end up requiring in-depth valuation, multi-state coordination, or significant documentation.

Presti & Naegele provides comprehensive support to prevent these common pitfalls. Their hands-on approach helps executors and family members avoid missteps that could delay the process or increase the estate’s tax burden.

How Estate Tax Is Calculated

Understanding how estate tax is calculated can help families prepare for what lies ahead.

Here’s a simplified overview of the process:

Calculate the gross estate – Add up the fair market value of all assets at the date of death.
Apply allowable deductions – These may include debts, funeral expenses, administrative costs, charitable donations, and more.
Determine the net taxable estate – Subtract the deductions from the gross estate.
Apply the federal estate tax rate – As of 2025, the estate tax rate can reach up to 40%, depending on the estate’s size.
Account for the federal estate tax exemption – Each estate is eligible for a lifetime exemption (subject to change based on current law).

It's also important to check if the state where the decedent lived (or owned property) imposes its own estate or inheritance tax, which adds another layer of complexity.

Because these calculations depend on current tax law, which can shift, having a partner like Presti & Naegele helps ensure accurate, compliant, and tax-efficient filings.

The Impact of Retirement Accounts on Estate Tax

Many people are surprised to learn that retirement accounts—such as IRAs, 401(k)s, and other tax-deferred plans—can complicate estate taxes.

Here’s why:

These accounts are often among the largest assets in an estate.
Distributions from these accounts can trigger income tax obligations for beneficiaries.
If not properly titled or structured, they can increase the taxable estate value.

Strategic estate planning can help minimize these impacts. This might involve reviewing beneficiary designations, coordinating required minimum distributions, or exploring trust structures in certain cases.

Presti & Naegele advises clients on how to incorporate retirement assets into their estate plan without exposing heirs to unnecessary tax burdens.

What Effective Estate Tax Planning Looks Like

A well-structured estate tax plan is more than just a will or a list of assets. It’s a comprehensive approach that includes:

Full inventory of assets, including property, investments, retirement accounts, and personal items.
Valuation support to establish fair market values that will stand up to IRS scrutiny.
Identification of all eligible deductions, such as debts, funeral expenses, or charitable gifts.
Federal and state compliance strategies, with forms and deadlines managed.
Clear documentation and coordination with executors, attorneys, and heirs.

The objective is simple: reduce taxable exposure while ensuring a smooth and respectful transition for the next generation.

With Presti & Naegele on your side, you get both the technical accuracy and the personal care needed to guide families through a complex and emotional process.

Why Choose Presti & Naegele for Estate Tax Services

Estate tax matters require more than just financial math—they require experienced professionals who understand both the letter of the law and the sensitivities of working with grieving families.

Presti & Naegele brings more than 40 years of expertise in estate tax preparation and planning. Here’s why clients across the U.S. turn to them:

Specialized expertise in estate tax law, valuation, and IRS compliance.
Personalized attention from CPAs who take the time to understand your goals and family needs.
Strategic planning to reduce tax exposure and ensure every deduction is maximized.
Clear, compassionate communication throughout the entire process.

From start to finish, they bring clarity, precision, and peace of mind—qualities that make all the difference in high-stakes estate matters.

Who Benefits Most from Expert Estate Tax Help

Estate tax isn’t just a concern for the ultra-wealthy. A growing number of families fall within the scope of federal or state estate taxes, particularly those with:

Multiple properties
Large retirement accounts
Family-owned businesses
Investment portfolios

You may benefit from estate tax planning if:

You want to preserve wealth for your heirs
You are serving as an executor or trustee
You’re managing a complex or high-value estate
You want to reduce future tax liabilities

Even if your estate is below the federal exemption threshold, it may still be affected by state-level estate taxes or other tax implications.

Presti & Naegele helps families identify these risks early and build solutions that last.

Steps to Begin Your Estate Tax Plan (or Settle an Estate Post-Death)

Whether you're planning ahead or managing an estate after a loss, here’s how to get started:

1. Inventory All Assets

Start by listing every major asset—homes, accounts, businesses, valuables. Be thorough.

2. Determine Potential Tax Exposure

Estimate the total value and compare it to the current federal exemption threshold. Include any state-specific rules that may apply.

3. Identify Planning Opportunities

This might include lifetime gifting, charitable donations, or leveraging certain deductions.

4. Work with a Trusted Professional

Consult with a firm like Presti & Naegele to get a customized estate tax strategy based on your family’s situation.

5. Stay Updated

Tax laws change. Your estate plan should be reviewed regularly to make sure it still meets your goals and reflects current regulations.

Starting early gives you the most control—and the greatest opportunity to protect your legacy.

Frequently Asked Questions About Estate Tax

What is the federal estate tax exemption?

As of 2025, the federal exemption is subject to change due to expiring tax laws. Currently, estates below a specific threshold may owe no federal estate tax. However, this limit is expected to decrease in future years—potentially affecting more families.

Is there a difference between estate tax and inheritance tax?

Yes. Estate tax is paid by the estate before distributions are made to beneficiaries. Inheritance tax, imposed by a few states, is paid by the recipient after they inherit assets.

What happens if an estate tax return is filed late?

Filing late can result in penalties and interest, and potentially delay distributions to heirs. That’s why prompt, accurate filing is critical.

Can estate taxes be reduced or avoided?

Yes, with proactive planning. Strategies like charitable giving, lifetime gifting, and proper titling of assets can reduce the taxable estate.

Do beneficiaries pay taxes on inherited assets?

Generally, beneficiaries do not pay estate tax—but certain assets (such as tax-deferred retirement accounts) may trigger income tax upon distribution.

Presti & Naegele helps clarify which assets may have tax implications and how to reduce their impact.

Conclusion: Estate Tax Clarity Starts Here

Estate tax isn’t just a legal hurdle—it’s a key factor in whether your family receives the inheritance you intended. Proper planning ensures your assets are protected, your wishes are honored, and your heirs aren’t left with unnecessary complications or costs.

Whether you’re preparing your own estate or managing one after a loved one’s passing, having the right experts at your side makes all the difference.

Schedule a consultation with Presti & Naegele to get clear, confident guidance on estate tax matters. With decades of experience, personalized support, and nationwide service, they’ll help you protect what matters most.

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