There are several tools available to avoid estate taxes and keep assets for your beneficiaries after you die. Here are some of the most common:
- Lifetime Gifts: One of the simplest ways to reduce your estate tax liability is to make lifetime gifts to your beneficiaries. You can gift up to a certain amount per year to an individual without incurring gift tax, which can reduce the value of your estate subject to estate tax.
- Irrevocable Trusts: An irrevocable trust is a legal tool that can be used to transfer assets out of your estate and into the trust, which can reduce the value of your estate subject to estate tax. An irrevocable trust is managed by a trustee who is responsible for administering the trust according to the terms set out in the trust document.
- Family Limited Partnership: A family limited partnership is a legal tool that can be used to transfer assets to your beneficiaries while retaining control over those assets. The partnership can also provide asset protection benefits.
- Life Insurance: Life insurance can be used to provide a source of liquidity to pay estate taxes, allowing your beneficiaries to inherit your assets without the burden of estate tax liabilities.
- Qualified Personal Residence Trust: A qualified personal residence trust is a legal tool that can be used to transfer ownership of your primary residence or vacation home to a trust, while allowing you to continue to live in the home for a specified period of time. This can reduce the value of your estate subject to estate tax.
In conclusion, there are several tools available to avoid estate taxes and keep assets for your beneficiaries after you die, including lifetime gifts, irrevocable trusts, family limited partnerships, life insurance, and qualified personal residence trusts. It is important to work with an experienced estate planning attorney to determine which tools are best suited for your unique situation. Contact Fillmore Spencer today to schedule a consultation with an Estate Planning expert who can advise you as you plan for your future and prepare for anything that may come your way.