Trillions of dollars will fall into the hands of heirs in the next three
decades as high net worth individuals retire. Responsible parents and
grandparents minimize estate taxes by taking prudent steps now instead
of letting the estate go into probate. According to an
article by Business Insider, the U.S. is on the verge of a major transfer of wealth
as members of the Greatest Generation leave money to their baby boomer
children. A second wave of occurs in the next 30 years as baby boomers
leave their assets and money to children typically in the millennial generation. A
piece by CNBC points out at least $16 trillion in wealth will likely transfer
from one generation to the next. Twenty states impose an inheritance tax.
This year, the federal estate tax exemption went up to $5.49 million,
which means heirs receive a large chunk of inheritance that’s tax-free.
Talk to a lawyer who specializes in estates to learn about several strategies
to transfer assets.
Enjoying the annual gift tax exclusion
One way to transfer money to your loved ones is by using the gift tax exclusion
of $14,000 each year. your beneficiaries receive the monetary gift without
it affecting federal taxes. A person with several children could make
separate gifts of $14,000 each, according to an
article by thinkadvisor.com. Grandparents are also able to use the annual gift
tax exclusion to transfer money to grandchildren.
Creating a charitable lead trust
Another option is to give to
charities while also helping beneficiaries. A charitable lead beneficiary receives
income from a trust during the trusts terms. After the term expires, the
remaining assets go to the non-charitable beneficiaries such as your children
or grandchildren. A charitable trust as part of your estate planning is
a creative way to show your philanthropic side without alienating dependent
loved ones. An
article by the nasdaq.com points out charitable giving is a win-win for a wealth plan.
At the Law Offices of James C. Shields, we provide attentive, professional
service with reasonable fees for services such as probate work, living
wills, power of attorney, medical planning, advance directives, guardianship
and conservatorship. Talk to us about living trusts, spendthrift trusts
and last will and testament. For more tips on how to minimize estate taxes
by taking prudent steps, please
contact us today.