Through good estate planning, you have the opportunity to make sure that the assets you have worked hard to acquire over the course of your life will be transferred to your heirs smoothly after you pass away. Estate planning can also preserve your assets, and prevent them from being depleted by estate taxes before they ever get into your family members’ hands.
Large estates are subject to estate tax. This is a federal tax that is levied at the time of a person’s death, against the net value of the estate they owned. There are government tax exemption levels that will automatically be applied. However, if your estate’s value exceeds $11.18 million, you will not be exempt and you will need to find other ways to hopefully avoid these significant taxes.
If you are not exempt from federal taxes and you want to make sure your heirs receive as much of your estate as possible, you can use the following three methods to achieve your goal:
Charitable Transfers
You can also reduce the overall value of your estate to reach exemption levels by making a gift to charity. Charitable transfers can happen while you’re still alive or you can set them up to occur upon your death. Lifetime charitable transfers have the added benefit of going toward income tax reduction. You may also want to consider creating a Charitable Remainder Trust. This is a type of irrevocable living trust which allows income to be disbursed to beneficiaries before the remainder is ultimately donated to a charity of your choice.
Irrevocable Trusts
In general, irrevocable trusts are an excellent tool for reducing estate taxes if the value of your estate exceeds the exemption . You might consider an AB trust or an ABC trust. Irrevocable trusts are a tool through which a trustee manages assets on behalf of a beneficiary.
Contact ElDeiry & ElDeiry, P.A. for Estate Planning Guidance
At ElDeiry & ElDeiry, P.A. we are passionate about helping our clients create estate plans that are uniquely tailored to their goals and values. If you need more information about estate taxes, or if you’d like to sit down with us to create an estate plan or update an existing plan, we would be thrilled to hear from you. Contact our firm today!
Eldeirylaw
Latest posts by Eldeirylaw (see all)
- Ways In Which A Will & A Revocable Trust Work Together - May 15, 2023
