Estate Planning Lawyers

Reduce Estate Tax Liability: 5 Gifting Strategies by Estate Planning Lawyers Near Me in Williamson

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Planning what happens to your assets when you are gone and how your heirs will inherit your estates is essential to avoid conflict and provide a secure future for loved ones, even if you are no more for their assistance. Estate taxes can take a big bite out of what you leave behind for your loved ones, but there are ways to reduce these tax deductions.

According to estate planning lawyers near me in Williamson, several strategies can help you exempt tax deductions while gifting your assets to your hierarchy.

5 Strategies by Estate Planning Lawyers Near Me Williamson to Reduce Tax Deduction

1.      Annual Gifting

Transferring your assets as an annual gift can help you to transfer your property free from tax. Every year, you can give gifts to others up to a certain amount without paying taxes. This amount is yearly updates, and according to the IRS, in 2024, you can pay up to 18000$ per person while keeping it tax-free.

2.      Lifetime Gift Tax Exemption

For married couples, the combined limit for 2024 is $36,000. For example, if you are married and have two married children and two grandchildren, you and your spouse can each give up to $36,000 to each of your children, their spouses, and the grandchildren in 2024 without needing to file a gift tax return or pay any tax. This means you can give a total of $216,000 in tax-free gifts.

3.      Irrevocable Life Insurance Trust (ILIT)

Irrevocable life insurance trusts (ILIT) help individuals ensure the benefits from a life insurance policy can avoid estate taxes and follow the insured’s interests. ILITs are irrevocable. This means the insured cannot change or undue the trust after its creation. This allows the premiums from the life insurance policy to avoid estate taxes.

4.      Trusts for Charitable Giving

Special trusts, such as Charitable Remainder Trusts (CRTs) or Charitable Lead Trusts (CLTs), can be established to benefit charities while lowering inheritance taxes.

According to estate planning lawyers near me Williamson, a Charitable Remainder Trust (CRT) allows you to place assets in the trust and enjoy income from them for a predetermined length of time before the remaining assets are donated to the charity of your choice, potentially lowering inheritance taxes. A Charitable Lead Trust (CLT), on the other hand, pays revenue to the charity for a defined period before passing the remaining assets to your beneficiaries, thus lowering your estate’s tax liability.

5.      Family Limited Partnership (FLP) or LLC

Those with significant assets or a family business may benefit from moving them to a Family Limited Partnership (FLP) or Limited Liability Company (LLC). This allows you to gift or sell your partnership or company shares to family members while taking advantage of valuation discounts.

These savings are the result of passing partial interests rather than full ownership, which allows you to transfer more excellent money while utilizing less of your gift tax exemption.

End Note

These tax reduction strategies by Estate Planning Lawyers Near Me Williamson can help you save your hard-earned earnings and can provide you with the tax-free opportunity to transfer your assets with your loved ones.

Need help regarding how to reduce your estate tax liability and secure your family’s financial future? Contact us today.