Planning your estate is one of the most important decisions you will face as you age. Without a well-planned estate, what happens to your assets if you pass away or become incapacitated may be decided by a court, and there’s no guarantee its decision will align with your desires. Inheritance taxes, which the government collects when someone passes away, can be an unwanted surprise for surviving family members. The best way to avoid this is to plan ahead.
What is Inheritance Tax?
Estate tax, also known as inheritance tax or even the “death tax,” is collected on earnings that you gain after you inherit assets. While estate law may seem complicated, there are concrete steps you can take to reduce or avoid the exorbitant taxes your family could pay on your estate.
How to Reduce Inheritance Tax on Your Estate
When you are planning your estate, consider the following options for reducing or avoiding taxes on your assets:
- Consider a trust instead of a will. A trust is a written agreement that allows you to manage your financial assets while you are still alive, and it holds up after your death. If you use a trust instead of a will, you will not have to go through probate. State probate requirements may be expensive and time-consuming.
- Make a lifetime gift to a child or grandchild. Annual lifetime gifts of $ 15,000 or less doe not mandate the payment of a gift tax. You can give $15,000 to a recipient per year, or $30,000 per year if you are giving in conjunction with your spouse.
- Make a uniform transfer to a minor. A uniform transfer occurs when you gift an amount of money to a custodian, who will “guard” the gift until the recipient reaches a certain age. In this instance, the minor will have no access to the gift until he or she reaches the age of majority. .
Planning Your Estate with an Attorney
You can’t put a price tag on peace of mind for your family. By hiring an experienced New York estate planning attorney, you can rest assured that your loved ones will be cared for in the future. At Lissner & Lissner LLP, we have over 65 years of experience in elder law, estate planning, and estate administration. Contact us or call (212) 307-1499 to schedule a consultation today.