Proud Neighbors In Cincinnati

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Strategies for minimizing estate taxes

On Behalf of | May 2, 2024 | Estate Planning & Elder Law |

Estate taxes can take a significant portion of your estate, reducing what you can pass on to your loved ones.

However, there are strategies you can employ to minimize these taxes and ensure the preservation of your assets for future generations.

Plan early

Did you know that only 46% of seniors over 55 years of age have a will, much less an estate plan? However, to minimize estate taxes, you should start your estate planning early. Take advantage of tax-saving opportunities and structure your assets in a way that minimizes tax liabilities. Waiting until later can limit your options and result in higher taxes.

Gift assets during your lifetime

When you gift your assets to your beneficiaries during your lifetime, you can reduce the size of your estate and potentially lower your estate tax liability. The annual gift tax exclusion allows you to gift up to a certain amount each year to each of your beneficiaries without incurring gift taxes.

Use trusts

By placing assets into certain types of trusts, such as irrevocable life insurance trusts or charitable trusts, you can remove them from your taxable estate while still retaining some control over their distribution.

Take advantage of tax-free transfers

Certain transfers are not subject to estate tax, regardless of their value. For example, assets left to a surviving spouse are generally not taxed due to the unlimited marital deduction. Additionally, assets left to charity are typically exempt from estate tax.

Consider life insurance

Life insurance can be a valuable tool for estate planning, especially for those with large estates. Proceeds from life insurance policies are generally not subject to income tax, but your heirs can use them to pay estate taxes.

Protect your heirs from estate taxes by creating a comprehensive estate plan.


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