When you think of an estate plan, your goal is to leave a legacy for future generations to enjoy. It should be part of your overall plan to leave something for your heirs and beneficiaries to remember you by. It can also be your effort to carry on the traditions and values that you have set forth over the years.
Whatever the plan you have for your estate, the assets have to be there in order for your estate to be effective. With that, steps must be taken to protect it from invasive estate taxes. This post will highlight a few strategies that can help.
Marital transfers – Under federal law, you may transfer an unlimited amount of money or property to your spouse upon your death without incurring taxes.
Gifting to children – If you are not currently married, but have children, you can make annual gifts to them of up to $12,000 without incurring a tax. If they are under the age of 18, gifts can be made to a trust. While $12,000 per year may not seem like a significant amount of money, these annual gifts can grow substantially over the years; which eventually can benefit your estate.
Transfers to insurance trusts – If you are not married or have children, you may consider breaking up your estate into smaller amounts that can be transferred into irrevocable insurance trusts. This way, the estate can be transferred into intended persons automatically upon your death.
If you have additional questions about how to reduce estate taxes an experienced estate planning attorney can help.