Estate Planning Isn’t Just For The Elderly

Happy, smiling couple in their sixties.

How can you avoid estate taxes when crafting an estate plan?

On Behalf of | Dec 18, 2023 | Estate Planning

Crafting an estate plan requires more than your asset distribution preferences. Generally, you will also want to minimize your estate plan.

If you implement thoughtful strategies, you can ensure that your heirs receive a substantial inheritance with fewer tax complications.

Learn the applicable exclusion amount

The applicable exclusion amount allows you to pass on a specific value of assets without the burden of taxes. Staying up to date with the law so you can adjust your will accordingly will help you maximize the advantages of using the exclusion amount.

For 2024, estates with assets over $13,610,000 must file an estate tax return. Keep in mind that assets include property, money and other valuable belongings.

Create trusts

Many people use trusts to minimize estate taxes. An irrevocable trust can remove an asset from the taxable estate. While you cannot change the irrevocable trust, it does allow you to provide a structured way to pass on your wealth while minimizing your tax liabilities.

Offer gifts to family members

If you have assets or heirlooms to pass on, consider gifting them during your lifetime. Not only does gifting allow you to see your loved ones’ reactions, but it also reduces the taxable estate. You have an annual gift exclusion to transfer assets to your heirs incrementally to minimize their tax burden.

When it comes to avoiding estate taxes, gifts and charitable donations can help. Donating to a charity constitutes a tax deduction but also allows you to allocate your assets to an organization that you want to support.