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Every Virginia adult should have an estate plan. These documents, which typically include a last will and testament, a durable power of attorney, and an advanced directive for healthcare, are an important way to ensure that your interests are protected during your life and that your wishes are respected after your death. Estate planning is also important when it comes to minimizing taxes that your heirs may have to pay.
While Virginia does not have a state inheritance or estate tax, federal estate taxes may apply depending on your situation. Smart estate planning can help reduce or even eliminate these taxes, such as through trusts. Our Virginia estate planning lawyers can help you understand the tax implications of your estate planning choices and work with you to develop a smart estate plan.
Poole Brooke Plumlee offers skilled legal representation to families and individuals as they navigate life. Whether you require advice on tax planning, family law, or your estate, we will offer you smart advice to help you achieve your goals. Reach out to our law firm today to talk to a Virginia Beach estate planning attorney.
Potential Taxes on Your Virginia Estate
There are two main types of taxes that may apply to an estate in the United States: estate taxes and inheritance taxes. An estate tax is assessed on the estate itself when assets pass to the decedent’s heirs. An inheritance tax is paid by heirs after they inherit assets.
In 2007, Virginia eliminated both estate taxes and inheritance taxes. When it comes to these taxes, you won’t have to worry about state taxes if you are a resident of Virginia. However, depending on the size of your estate, you may have to consider federal estate taxes when estate planning.
As of 2025, any estate with assets of more than $13,990,000 for a single person or $27,980,000 for a couple will be subject to federal estate taxes. If you anticipate leaving a sizable estate, there are smart estate and tax planning strategies that you can employ to minimize these taxes. This may include:
- Establishing a trust, such as a qualified personal residence trust, an irrevocable life insurance trust, a marital trust, or a charitable trust.
- Making gifts to family members or minors.
- Making donations to charities.
Our law firm includes attorneys who specialize in business law, estate planning, and tax planning. Our combined experience and expertise allow us to advise our clients on the best possible strategy for minimizing federal estate taxes based on their unique situation.
Importantly, this larger estate tax exemption will sunset on December 31, 2025. Unless Congress extends this law, the federal estate tax exemption will be reduced to approximately $7,000,000 in 2026. As such, more estates will potentially be subject to these taxes, making smart estate planning even more critical.
Beyond estate taxes, there are other taxes to consider when planning your estate. For example, if you want to transfer large sums of money to a younger family member, you might be required to pay the federal generation-skipping transfer tax. This tax may be imposed at a flat rate of 40% if you transfer assets valued above the federal estate tax exemption to a family member who is at least 37.5 years younger than you are (typically a grandchild).
Similarly, if you give loved ones or charities more than $19,000 annually (or $38,000 if you are married), then you may be required to pay gift taxes. Any annual gifts over this threshold must be reported on a gift tax return. The taxes on larger gifts can be offset by the estate tax exemption.
Finally, if an estate goes through the probate process, then it will be assessed a probate tax of .13 per $100 of assets (for both state and local probate taxes). For example, if your estate is valued at $250,000 and it goes through probate, then the probate tax will be $325. This is a relatively small amount for most estates, but it may be worth exploring how to avoid probate and the other expenses of a probated will.
Filing an Estate Tax Return
For larger estates, filing a federal estate tax return may be necessary. Because Virginia does not have an estate tax, it is not necessary to file a state estate tax return.
If required, an estate tax return must be filed and any tax due paid 9 months after death. An estate tax return must include both probate and non-probate assets. Essentially, any asset that a person owns at the time of their death should be included in an estate tax return. This may include real estate, bank accounts, investment accounts, cars, jewelry, artwork, retirement accounts, and life insurance policies. Even if these assets have a named beneficiary, it should still be included in the estate tax return.
For federal estate taxes, an asset is valued at fair market value as of the date of the decedent’s death. For example, if a person owns commercial real estate, then the value is not what they paid for it 20 or 30 years ago, but its value at the time of their death. This sometimes requires the assistance of a professional appraiser for more complicated or unusual assets (such as artwork).
A federal estate tax return must be filed within 9 months of a person’s death. In addition to the return itself, a death certificate, a copy of the last will and testament, any asset valuations, and trust documents (if applicable) must be submitted. A skilled Virginia estate attorney can help ensure that these documents are appropriately filed.
Beyond estate taxes, the personal representative (executor) of the estate must ensure that other tax returns are filed. This includes an income tax return filed by April 15th of the following year, along with any other tax returns.
Comprehensive Estate Planning Services in Virginia
Although Virginia does not have estate taxes, careful estate planning can still help to minimize taxes, increase privacy, and achieve other goals. This can include reducing or eliminating the need for probate to avoid probate taxes. If an estate does not go through probate, there is also the benefit of not having the details of your estate become a matter of public record.
For individuals and couples with significant assets, our Virginia Beach estate planning attorneys can work with you to develop a strategy to minimize federal estate taxes. This work is particularly crucial as the much larger estate tax exemption is set to end by December 31, 2025.
There are numerous strategies that can be employed in estate planning that take into consideration all of the taxes that might be levied on an individual or family. Our law firm will thoroughly analyze your situation and your financial goals to offer customized solutions for your needs. This can include everything from establishing a trust or a limited partnership to transferring assets to a loved one.
Regardless of your level of wealth, the most important thing is that you have an estate plan in place before you become sick or incapacitated. An estate plan is about much more than reducing taxes. It is also a way to plan for the future, both during your life and after your death. We can explore the various options available to you to help you decide on what best suits your current and future needs.
Contact Our Law Offices Today for Skilled Estate Planning
Having an estate plan in place allows you to address multiple different issues, such as what happens if you are unable to make decisions about your finances or your healthcare. It can also be used as a way to plan gifts, reduce taxes, and make sure that your assets go to your loved ones after your death. Our estate planning attorneys will work with you to help you craft an individualized plan that helps you achieve your goals.
Based in Virginia Beach, Poole Brooke Plumlee offers skilled legal representation related to tax planning and estate planning to clients throughout Virginia. Our law firm has diverse experience across a range of practice areas, including tax law, estate planning and litigation, real estate law, and business law. This gives us the insight to advise our clients on their estate plans and ways to take tax implications into account when coming up with an estate plan. To learn more or to schedule a consultation with a Virginia Beach estate planning lawyer, call us at 757-499-1841 or fill out our online contact form.
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