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Legitimate ways to reduce estate taxes

There are many strategies that can be put into place when thinking about reducing estate taxes. Taking advantage of loopholes in the law can lead to great financial gain, therefore it is important that you educate yourself on legal matters surrounding estate planning.

This blog will serve as a brief overview on methods that you can practice or consider when planning your estate.

Transferring through marriage

It is possible to defer the taxes until the time of your spouse's death through marital transfer. This will mean that your spouse will not be subject to taxes, unless he or she wishes to pass on the estate to another person.

Annual gifts

Anyone can make gifts to a person to the sum of $12,000 each year without being taxed. This is often a common procedure in respect to children or grandchildren. If each spouse contributes to this, a sum of $24,000 per year can be sent to each person, tax-free.

Life insurance trusts

Small amounts of an estate can be transferred to an irrevocable life insurance trust. The life insurance proceeds will be an investment that will turn into a larger asset, which is not usually taxable.

Charitable transfers

Giving funds to charities during your lifetime or planning to give gifts to charities upon death is a way to increase the taxable size of the estate as well as giving tax-free funds to good causes.

Legal Advise

It is important to attain legal guidance when estate planning so that you can make the most of your financial assets.

Source: FindLaw, "10 ways to reduce estate taxes," accessed July 28, 2017

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