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4: Minimizing Your Tax Liabilities
Virtually everything you own or control may be subject to estate, inheritance, gift and generation–skipping taxes, which can substantially reduce what you pass on to your heirs.
The new tax laws have moved the dial on federal estate tax. If the value of your taxable estate is less than the federal estate tax exemption at the time of your death, it will not be taxed by the federal government. ($11,200,000/individual, and rising beginning in 2018 through 2025). But for estates valued over that amount, creative estate planning can avoid or minimize tax liabilities. Keep in mind that many states still have an estate or inheritance tax on distributions to non-charitable heirs.
Things You May Want to Consider
- Sometimes you can benefit from giving up control of an asset during your lifetime.
- New tax laws in 2012 and 2017 may change the impact of your current plan. It’s always a good idea to review your estate plan every 5 years.
- Creative planned gifts can be a simple and fulfilling way to receive a tax benefit while providing for a meaningful legacy.