STRATEGIES TO HELP LESSEN THE IMPACT OF TAXES
To reduce or mitigate almost all these taxes, you can use certain strategies, such as:
- Evaluating the types of assets you have and how they will be taxed; exploring ways to diversify the taxation of your assets.
- Strategic gifting of highly appreciating assets to exclude future appreciation from estate tax.
- Creating trusts for a surviving spouse to avoid wasting state estate tax exemption amounts, lowering the size of the survivor’s taxable estate.
- Allocating generation-skipping tax exemption to transfers to skip persons, such as grandchildren.
- Ensuring the estate has access to cash to avoid sale of appreciating, illiquid, or cherished assets.
LIFE INSURANCE CAN HELP ENSURE SUCCESS
Life insurance can be a very effective tool in the estate planning process and can help you:
- Provide your heirs with a death benefit that is generally income and estate tax-free (if structured properly).
- Provide liquidity to help pay any estate taxes that may be due.
- Ensure any outstanding debts are paid.
- Manage probate costs.
- Protect against potential creditor issues.