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Thoughtful Estate Planning reduces Taxes

Taxes impact only those with a significant estate. If this is you, it makes sense to discuss your situation with an attorney who specializes in Estate Planning.

Here are some things to consider:

1. Wills should be drafted to minimize Federal and State estate taxes.

2. Most life insurance should be held in an Irrevocable Life Insurance Trust.

3. Gifting strategies should be considered to minimize estate and/or inheritance taxes, if applicable.

4. Consider paying tuition and medical expenses for a third-party directly to the institution to avoid impacting annual gifting limits.

5. For those with charitable intentions, consider gifting from your pre-tax retirement accounts, such as traditional IRAs and 401(k) plans—Especially if you no longer itemize your deductions.

6. 529 Plans allow accelerated gifting to fund higher education costs. You can gift up to five years of annual gifts upfront; removing the assets and any subsequent appreciation from your estate in year 1. Depending on how much you fund, the gift actually "completes” over the next five years or less. 529 plans are also unique because you can take the money back if you need it.

"The best way to reduce paying estate taxes is to give your assets away before they appreciate,” Sam Walton in Made in America.

Click here to learn about Taxes in Retirement

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