New York Estate Planning News - Find a NY Estate Attorney

Strategies to Reduce Estate Taxes

The federal estate tax is imposed on estates exceeding $5 million. And once you’ve got estates of that size, many people become inclined to find ways to reduce their estate tax.

The researchers at FindLaw, while no replacement for a qualified New York estate planning attorney, have put together a list of some general ideas on strategies for reducing estate tax. Five of these estate tax reduction strategies are:

  • Marital Transfers. Generally, lifetime gifts and bequests at the time of death to one's spouse are not subject to estate taxes.
  • Lifetime Gifts to Children. Each person can usually make annual lifetime gifts up to $13,000 for each of their children without incurring a gift tax. This will reduce your taxable estate at death. If you take this approach you have to start a few years in advance.
  • AB Trust. This is where each spouse leaves their property to an irrevocable trusts. A complicated but sensible idea, the AB Trust was discussed at greater length earlier on this blog.
  • Uniform Transfer to Minors. This is a form of gifting used where children are still minors. The gift is given to a custodian for the benefit of the child, and is distributed to the child when he/she reaches the age of majority. The tax benefits are similar to that of lifetime gifts.

Estate planning to reduce estate taxes is a personal decision. These strategies may not be applicable to everyone, and you will want to speak with an estate planning attorney to help determine which is best for you.

Related Resources: