For many people, estate planning simply involves creating a list of their assets and intended beneficiaries, along with details regarding who inherits which assets. Others have to consider their situations more carefully due to more complicated circumstances.
Testators drafting estate plans sometimes have to make special provisions for their medical challenges or the unique needs of their vulnerable family members. Other times, they may need to plan to protect their resources from issues that could diminish what their loved ones inherit.
Are estate taxes sufficient reason to draft additional documents or revise an existing estate plan?
Estate taxes are costly
Although those who die in Virginia don’t pay state estate taxes, they could owe federal taxes. If an estate has a high enough value to be vulnerable to estate taxes, careful planning is likely beneficial. The more the overall value of the estate exceeds the current federal threshold, the higher the final estate tax rate that applies.
As of 2025, estates worth $13.99 million or more are theoretically subject to estate taxes. The lowest tax rate that applies is 18%, and larger estates may have to pay substantially more than that.
The highest possible federal estate tax rate is 40% of the total estate value. Losing just under a fifth or as much as two-fifths of an estate is a major setback to beneficiaries already grieving the loss of a loved one.
Testators who recognize the significant negative impact that estate taxes could have can plan accordingly. Trusts, gifts and co-ownership are all ways to diminish the value of an estate and the chances of estate taxes. The right estate planning moves can help ensure that chosen beneficiaries inherit as much of their resources as possible.
