Wealth Transfer: Minimize Estate Taxes By Taking Prudent Steps Now

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.

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