3 Tips For Saving Money On Estate Taxes
Throughout your life you will pay a lot of money in taxes. No one can escape paying taxes, not even in death. There are death and estate taxes put in place, so that even after you pass away, the government will take some of your money. Although you cannot prevent all of the taxes, you can do some things to help you protect your money. Here are a couple tips for saving on estate taxes.
1. Gift Before You Die
Each year the IRS gives a limit to how much you can gift friends and family without having to pay any taxes on it. This year you can gift up to $14,000 per individual. This means that if you have a married child you can give the couple $28,000 without paying any taxes.
Consequently, if you are worried about your children not getting their money because the IRS is taxing it after you die, try gifting it before.
2. Opt For Joint Ownership
Another great option for dodging estate taxes is to have joint ownership on your property. For example, if you know you are going to give your house to your only son after you pass away, have him put on the deed of the house before you pass away. If you chose to have the house given to him through the will, he will have to pay taxes on the value of the home at your death. This could be a great amount of money. However, if you have him on the title and the deed, when you die the ownership passes over to him, and although there may be an inheritance tax, it is probably less than the estate tax.
3. Put Your Money and Property In Trusts
In the past, wills used to be the most common way for people to pass along their estate and property. However, wills are taxed differently than trusts are. Trusts are a much safer and smarter way to go when it comes to estate planning. You can put your house, bank accounts, investments, and much more into a trust. Then when you pass away, the money and property in the trust will be executed according to your instructions.
Unfortunately, you will still have to pay some money for taxes in trusts, just not as much as if you had put it all in a will.
By using these three tips, you can save money on estate taxes.
To learn more, contact an estate planning attorney like Beck Law Office PC LLO.