| There are many people who will look for even the | | | | leaving the assets to the heirs. This means that you |
| tiniest deduction on their annual tax return but will not | | | | can put assets worth $2 million in credit shelter trust so |
| bother about minimizing the ultimate tax they might | | | | that both your spouse and your heirs benefit from it.o |
| have to pay on their assets. This tax is estate tax. In | | | | Gifting: You can lower your estate taxes by gifting but |
| order to minimize estate tax, you have to plan and this | | | | there are certain annual limits. You can gift just $12,000 |
| takes effort. | | | | a year to each person without incurring gift tax. This is |
| Most people are reluctant to think about estate tax | | | | done during your life time and you can do this annually |
| planning because they are do not want to think about | | | | so that your estate value decreases by the time you |
| dying or they are simply clueless that estate tax will | | | | die.o Insurance for liquidity: Smart planning reduces |
| eat up a large portion of their estate. | | | | estate tax but does not necessarily eliminate it. |
| When we talk about estate, it includes your home, | | | | Therefore, you should provide a way for your heirs to |
| personal investments, all pension plans, life insurance | | | | pay estate taxes, which has to be paid within nine |
| and annuities. If your estate is valued over $2 million, | | | | months of your death. The best way to provide for |
| you will have to pay estate tax and that is why it is | | | | this is through life insurance where the death benefit is |
| imperative that you spend time on estate tax planning. | | | | large enough to cover the taxes. However, this is |
| Some of the popular strategies for estate tax planning | | | | where prudence comes in. If you own the insurance, it |
| are as follows:o Credit Shelter Trust: If you use this | | | | will be considered as part of the estate. So, instead of |
| way of saving estate taxes, your spouse will not have | | | | having the insurance in your name, the policy can be |
| to pay anything when you die. The same tax benefit | | | | owned by an adult child or by a life insurance trust that |
| applies when the second spouse also passes away | | | | you can set up. |