Ten tips to reduce estate taxes

On Behalf of | Oct 23, 2017 | Estate Taxes |

It can be in your best interest to reduce the amount of taxes incurred by your estate. After all, who wouldn’t want to pass as much of their estate along to their loved ones as possible?

To help you out, these are 10 tips for reducing estate taxes:

Marital transfers

Lifetime gifts or bequests at one’s death are not subject to estate taxes as long as your spouse is a citizen. Eventually, your spouse’s estate entire taxable estate will be subject to estate taxes, including the lifetime transfer. But this can be a way to delay estate taxes, even if it does not eliminate them entirely.

Gifts to beneficiaries

You can make an annual gift of up to $12,000 per recipient without having it taxed. This means that spouses can collectively gift up to $24,000 per beneficiary per year – after several years, a hefty amount of money that will not be subject to gift tax.

Transfers to minors

As long as your intended recipient is still a minor, you can make a type of gift called a uniform transfer. A custodian is named for the gift until the child comes of age and can collect it.

Certain trusts

There are several kinds of trusts that are not subject to estate taxes, such as:

· AB Trusts

· QTIP trusts

· Irrevocable life insurance trusts

Family limited partnerships

In a family limited partnership, a family-owned business can be passed to the next generation and have its partnership income taxed at the children’s lower rate.

Private annuities

You can sell an asset to a younger generation with an agreement to pay annual amounts to the seller. The payments made to the seller will be part of their estate, but the asset will not be included.

Qualified family-owned business interests

If a qualified family-owned business meets a statutory set of requirements, it can be deducted from a gross estate.


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