Reducing Taxes on Your Estate for Heirs
When preparing your estate for future heirs, one concern you may have is taxes that may apply and reduce the benefits to your family. As of now, your estate would have to exceed $5 million in order to be subject to taxes. Republicans strongly oppose the estate tax altogether, so it is possible that recent elections may lead to the elimination of the estate tax. However, rather than relying on that to occur, it’s a good idea to prepare your estate properly for your loved ones.
Disclaimer Trusts Help Avoid Estate Tax
One way around being taxed if an estate is over the $5.45 million mark is a disclaimer trust. Everything beyond the $5.45 million tax-free amount can be disclaimed as a gift and put directly into another trust. Therefore, the direct heir (usually a surviving spouse) receives $5.45 million in assets without paying taxes, and the rest goes into a further trust for future heirs to enjoy without taxes being removed. It provides a healthy sum for a surviving mate and ensures that additional funds that will go to children who can receive regular payouts from the disclaimer trust if this provision is made in advance.
Get Help to Learn How Estate Taxes Work
The Petrov Law Firm will be happy to help you develop an estate plan that ensures your money and assets are left to the people you love rather than being picked apart for government use. Call 619-344-0360 to get started today.