The Elder and Disability Law Firm, APC
There is more than one way to reduce estate taxes
Like many people, you may be concerned about estate taxes. Fortunately, when creating an estate plan, there are many things you can do to give yourself peace of mind. Here are some of the many methods to consider if you want to reduce your estate taxes:
- Marital transfers. As long as your spouse is not a non-citizen, lifetime gifts are not subject to estate taxes.
- Gifts to children and grandchildren. While there is a limit as to how much you can gift your children and grandchildren each year, this still remains one of the better ways to reduce estate taxes.
- The use of an irrevocable life insurance trust. You can transfer money from your estate into an irrevocable life insurance trust.
- Family limited partnership. This comes into play if you are looking to transfer a family owned business to the next generation.
- Charitable transfers. It's not the right choice for everyone, but a gift to charity upon your death can reduce the size of your estate, thus doing the same for any estate taxes.
These are not the only ways to reduce estate taxes, but they are among the most common strategies. As you learn more about the finer details of each one, including how to implement the strategy, it will become clear as to which direction you should head with your estate plan in the future.
Many people never think twice about reducing estate taxes. While you are not required to do so, it could have a negative impact on your heirs upon your death.
With so many laws governing estate planning and estate taxes, you need to understand your legal rights. When you know what you can and can't do, it's much easier to make a final determination as to the type of strategy that will suit you best.
By taking steps to reduce estate taxes, you'll feel much better about the overall condition of your estate plan and the future well-being of your loved ones.