If you are planning to pass down some valuable assets to your loved ones when you pass away, you probably want to be sure that it’s them, not the government, getting the biggest piece of your estate. Fortunately, there are ways to plan around the federal estate tax and legitimate ways to attempt and lower that burden on your family once you are gone. Let’s look at some suggestions a Woodland Hills estate tax planning attorney might have for you.
Can I Reduce Estate Tax By Sending Gifts?
One of the most effective ways to legally avoid paying extra estate taxes is through gifting. Each member of a married couple can give annual tax-free gifts to people each year. The maximum for each person is $16,000, so if both members of a couple decide to gift the maximum that is $32,000. This can be a good way to transfer a significant amount of money to your intended beneficiaries over time.
How Does a Trust Affect My Estate Tax Bill?
There are also different kinds of trusts that can be established. Some types can help you or a spouse protect certain assets better, while others can help ensure that certain assets are passed to family members and not the state.
Can I Transfer Money to My Spouse?
It is also possible to transfer money to your spouse over time. There are two important things to remember though. First, you can not transfer funds to a surviving spouse in this way if they are not a citizen. Second, this really just puts a delay on when estate taxes are taken.
You give money to your spouse and all of your other assets pass to them when you pass away. Then when they pass away, your estate could find itself owing taxes. So if you are going to leave things to your spouse, it might also be a good idea to establish plans on what they are going to do with your money once you are gone and if they can find ways to lower their estate tax burden.
Can Donations to Charity Lower an Estate Tax Bill?
Yes, if you include some plans for charitable giving in your estate, you can lower your estate tax burden. This is because the money that you are giving to charity is not seen as an asset, like the money you are passing on to your children and other loved ones. Having some charitable donations can help you reduce how much your estate could owe to tax collectors.
Consult With an Attorney
If you are ready to learn more about your estate planning options, contact the Law Offices of Yacoba Ann Feldman. We can schedule a consultation and give you the chance to learn more about how you can protect your estate and your loved ones from a massive tax bill.