It can be a shock for some Brevard County residents. They sit down their estate planning attorney to discuss passing on sizable assets and discover that taxes will take a big bite out of their estate.
A recent business journal news article urges people to learn about ways in which those tax burdens can be significantly reduced.
The bank executive who penned the article noted that one common strategy for reducing estate taxes is annual gifting. Each person can give up to $15,000 without triggering gift taxes. It can be a way of shifting assets to loved ones that would be inherited after your passing, reducing the estate and potentially lowering estate taxes.
If a person makes an annual $15,000 gift for 30 years, he or she would reduce the size of their estate by $450,000 and potentially save the heir about $180,000 in estate taxes. For some people, that reduction in estate value would get them under the lifetime estate tax exemption, which would eliminate the tax entirely.
Another way of fighting off estate taxes is through charitable giving and charitable lead trusts (CLT). A CLT provides annuity payments to the charity of choice at a fixed amount for a fixed set of years. Afterwards, the remaining assets are transferred to your heirs.
Note: you get a tax deduction when you fund the trust, which means you fight off some taxation on your income as well.
You can discuss these and other strategies with a skilled lawyer experienced in estate planning and asset protection.
Subscribe To This Blog’s Feed