Estate Planning Lawyer
Individuals are often looking to put protective measures in place to adequately safeguard their personal assets. Whether it be commercial or residential properties, financial investments or prized possessions, it is essential that an individual ensure that their belongings are properly managed both during and after their lifetime.
As an estate planning lawyer from a firm like Yee Law Group, PC can explain, the creation of an estate is one way in which an individual may go about obtaining such security. Although beneficial, estates can cause tax disadvantages if not understood and utilized correctly. Simple tricks can be used to assist in minimizing or even avoiding taxes that an estate may be subject to.
Create a Trust
Trusts are appealing to many individuals that want to make sure that their belongings are appropriately distributed to their designated beneficiaries. The creation of a trust can come in handy if someone is looking to reduce the amount of taxable income that an estate will acquire throughout its existence. The execution of trusts )such as living trusts and irrevocable trusts) means taking assets out of the individual’s name and transferring them over to the name of the trust. As a result, an individual reduces the number of assets within the estate, consequently limiting what can be taxed by the government.
Gift Family Members
An individual doesn’t have to pass away in order to reassign assets that are held within their estate. Individuals may choose to give family members such as children and grandchildren yearly monetary gifts or allowances. If the amount of money that is given is within legal qualifications, an individual may avoid having to pay any gift taxes. Progressive gifting of the estate’s assets over time may drastically lower the amount of income that is left upon the executor’s passing; this effectively lowers the net worth of the estate and the tax payments that it is responsible for.
Charitable contributions are a way in which an individual can positively give back to their community and create a meaningful legacy for either themselves or their family. Organizations in dire need of assistance are provided with the necessary resources to continue working towards their intended cause, while the contributor’s estate is granted a substantial tax reduction. This not only benefits the community but is advantageous to an individual that is looking to effectively reduce the size of their estate.
Schedule a meeting with an estate planning lawyer to discuss how to properly draft an estate and reduce its potential for future tax obligations.