The Tax Implications of Estate Planning: What You Need to Know 

Estate planning stands as a fundamental step for people who want to protect their future alongside that of their family members. Your estate planning foundation consists of essential documents such as wills and trusts and power of attorney but understanding taxes remains equally critical for your estate. 

Estate planning tax implications demand your understanding because an experienced attorney will help you steer clear of unexpected tax costs. 

1. Estate Taxes: Will They Affect You? 

The federal estate tax only affects estates above $13.61 million in value per individual according to the current tax laws for 2025. The majority of Oklahoma residents need not concern themselves with federal estate taxes because their property values fall below this threshold. When your estate approaches or surpasses the tax threshold you must establish proper planning strategies to reduce tax responsibility. 

The state of Oklahoma does not have laws that impose estate taxes or inheritance taxes on its residents for deaths occurring on or after January 1, 2010.

The implementation of new laws may occur in the future thus creating a reason to establish a plan that can adapt to these modifications. 

2. Gift Taxes and Lifetime Giving 

The IRS allows you to reduce your taxable estate by making lifetime gifts. The IRS allows tax-exempt gifts up to $18,000 annually per person starting from 2025. The annual gift exemption reaches $36,000 for each recipient when combined for married couples. 

There is a lifetime exemption for making gifts that is equal to federal estate tax value referenced above.  An attorney can help you track this and ensure you are making gifts wisely. 

3. Income Taxes and Inherited Assets 

Asset transfer methods result in financial tax implications which many people fail to recognize. Beneficiaries who inherit IRAs or retirement accounts must pay income taxes when they withdraw the money from these accounts. Proper trust planning helps avoid unnecessary tax liabilities that emerge from improper trust structures. 

Inherited real estate properties qualify for a “step-up in basis” which enables significant capital gains tax savings at the time of later property sales.

4. Planning Strategies to Reduce Tax Burden 

Strategies to minimize estate tax exposure include establishing irrevocable trusts as well as charitable donations and lifetime distribution plans and proper estate planning. 

Every family is different, and the right strategy will depend on your unique financial picture and goals. 

Work with a Trusted Oklahoma Estate Planning Attorney 

With Kevin L. Miller, PC, we help Oklahoma City individuals and families develop estate plans which protect your heritage and maximize tax benefits. Our team will lead you through your estate planning process from beginning to end with clarity and compassion regardless of whether you need a new plan or an existing one updated. 

Let’s plan for peace of mind. 

Call (405) 443-5100 to book your consultation appointment.