It is no secret that you can spend a lot of money in taxes after you pass away. The estate tax is designed to take a large portion of your hard earned money and give it to the state, rather than to your family. This is why it is important that you do everything that you can to protect your estate from being overtaxed. Here are 3 ways an estate-planning attorney can help you avoid being overtaxed:
1. Gift Property and Money Before You Pass Away
A great way to save money on taxes is to gift some of it before you pass away. The government sets an amount each year that you can gift someone without them having to pay taxes on the amount. This means that you can start giving your family their inheritance a couple years before you pass away and enjoy watching them use the money. This will ensure that they get to keep every cent that you give them.
2. Have Joint Bank Accounts and Property
Another way to protect your money is to have someone sign as a joint trustee on your bank accounts and property. For instance, if you want to give your child your house when you pass away, you should consider putting them on the title as a joint owner. This means that when you pass away the house will be completely in their name, without having to be taxed.
If you don't have a joint trustee on an account or property, it will go through a process of transferring those accounts and property into their name. This process will require that they pay a certain amount in taxes. Thus, naming a joint trustee on your accounts and property is a great way to avoid being overtaxed.
3. Create LLC's
Limited liability corporations are a great way to protect your money and your assets. When you meet with your attorney they will talk to you about creating these LLC's and the putting all of your property and money into these. Then if you have debt or lawsuits outstanding after you pass away, they generally cannot touch the money in the LLC's. That's because they are protected as a corporation and not part of your personal estate.
In addition, LLC's are taxed differently than a regular estate. Therefore you won't pay nearly as much money in estate taxes.
These are just 3 ways that you can save money on your estate taxes. If you want to know more, or simply have other questions you want to ask, try contacting a professional such as Edward G. Foster.
I am a real estate attorney, and I have been helping clients buy and sell property for many years. Some clients do not realize their legal obligations and options when it comes to purchasing or selling a house or land. I hope that this blog will be a way for people to get information about legal issues in real estate and what they need to know when doing business. Buying and selling property can be complicated, and all parties involved have legal obligations. Know what is expected of you, and you will be able to get the best out of your real estate transactions.