By: Carah Kiley
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Four Strategies to Reduce Estate Taxes
It’s one of the most frequently asked questions we hear at KLG Estate Planning & Probate Attorneys: How can I minimize estate taxes? The good news is that there are ways to reduce one’s estate taxes. With a little planning, there will be more assets going where you want them to go instead of toward taxes. Let’s explore four top strategies:
- Start giving away your wealth while you’re still alive. This reduces the value of your estate (and, thus, possible taxes). There are annual dollar maximums per gift recipient, but no limit on the number of people you can gift.
- Put your assets in a trust. With multiple types of trusts available, it is important to set up the right type for your particular needs. Your qualified attorney will fully explore your situation and assets to determine how one or more trusts could help shield your assets from estate taxes.
- Buy life insurance. If properly planned, a life insurance policy can generate a non-taxable payout upon death. This can be particularly useful for an estate that is simply too large to completely avoid estate taxes.
- Support your favorite charity. If you plan to support one or more charities with your estate, there are several strategies that can be implemented that may not only reduce your final estate tax bill, but could also increase the true value of your donation and give you a reduction in your current income taxes. This may involve setting up a charitable trust.
You will be happier knowing that more of your estate will be transferred to people and charities or other organizations instead of going toward a tax bill. However, as simple as some of these strategies sound, always seek the advice and guidance of a qualified estate planning attorney. That way, you will rest easy knowing the details are handled correctly, paving the way for your exact desired outcome.