David M Daggett CPA is a tax expert who helps people with all their tax planning needs. One of the things he helps many clients with is estate planning. With the proper estate planning, family members of the deceased can avoid paying an inheritance tax. You can avoid an inheritance tax by following these tips.
Create A Trust
When you create a trust, your loved ones can have less inheritance tax to pay based on the exemptions included in the trust. In most cases it will be you and your spouse and the inheritance tax will be greatly reduced at the time of your death.
Use Your Life Insurance
Make your life insurance payable to your loved ones instead of to your estate. In most cases, if the life insurance is not paid to the estate, the amount does not become part of the inheritance tax. Every state has different laws about life insurance so make sure you check before you plan.
If you want to avoid leaving your loved ones with an inheritance tax, you should consider giving them your assets while you are still alive. If your assets are gifted, your family members are not required to pay taxes on them.
If you are likely to inherit money and want to avoid paying an inheritance tax, talk to a tax planning professional or a Certified Public accountant like David M Daggett CPA. You don’t want to pay a tax you can avoid.