Three Ways to Minimize Your Estate Taxes

For many people, one of the biggest goals of estate planning is to minimize any taxes that have to be paid by the state upon your death. For the vast majority of people, estate taxes won’t even apply because under current law, estate taxes do not start until the value of your estate exceeds $11.58 million. For those with large estates, however, there are several things that you can do now to help ensure as little of your estate goes to the government as possible.

 Irrevocable Trusts

Irrevocable trusts are an excellent option when you are able to lock away certain assets for the rest of your life. When it comes to estate planning, there are several types of irrevocable trust that can be very beneficial. One of the most popular is the life insurance trust, which will allow you to put the policy premiums into a trust, and allow your loved ones to receive the benefits without being taxed.

Annual Gifting

One of the most enjoyable ways to reduce your estate taxes is to actually reduce the size of your estate by gifting money or assets to your loved ones. As of 2020, you can gift each individual loved one up to $15,000 per year without having to pay extra taxes on that amount. Not only will this reduce the size of your estate so you have to pay fewer estate taxes, but you will also be able to enjoy watching your loved ones benefit from these gifts.

 Charitable Donations

Charitable donations are another great way to minimize your estate taxes. There are two separate methods that can be used, both of which can provide significant advantages. The first option is to start donating money or other assets to your favorite charities now. By making these donations you will not only be reducing the size of your estate so there will be a lower estate tax burden, but you will also be able to benefit from reduced taxes in the year you make the donation.

The other option is to include charitable donations in your estate plan. You can set it up so that upon your death, certain assets automatically get transferred to the charity of your choice. This will remove the assets from your estate so that there are not any taxes due on them. You can use both of these options to help your favorite charities while also reducing the overall estate taxes that will be paid.

A Customized Solution

When working to reduce the amount of estate taxes that will need to be paid, there is no one size fits all solution. Instead, you should work with an experienced estate planning attorney to determine the best options for your unique situation. Contact Solan, Park & Robello to schedule a consultation to start, or update, your estate plan right away. 

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Solan, Park & Robello

Solan, Park & Robello is a full-service probate and estate planning firm offering experienced counsel in a wide range of estate planning matters—from preparation to administration to litigation.

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