Estate Tax Attorney Planning Secrets That Save Big Money
Key Strategies for Saving on Estate Taxes
One of the most effective strategies in estate tax planning is the use of trusts. Trusts can transfer assets out of your taxable estate, potentially saving your heirs from hefty tax bills. For instance, an irrevocable life insurance trust (ILIT) can remove life insurance proceeds from your estate, while a grantor retained annuity trust (GRAT) allows you to pass on appreciating assets with minimal tax implications1.
Another crucial tactic is gifting. The IRS allows individuals to gift up to a certain amount annually without incurring gift taxes. By systematically gifting portions of your estate, you can reduce its overall taxable value. In 2023, the annual gift tax exclusion amount is $17,000 per recipient2. This means you can give away $17,000 to as many people as you like each year, tax-free.