Because estate taxes can be considerable, depending on one’s worth, they can be reduced with proper estate planning in Georgia. Many types of trusts can help people avoid estate taxes, which generally include irrevocable trusts.
There are several ways to reduce estate taxes including:
- Gifting. People can reduce their estate taxes by gifting money over a lifetime. Each year, there is a maximum amount that can be gifted, free of gift taxes. In order to take advantage of this benefit, you need to be careful you meet all the regulations
- Qualified personal residence trust. This trust is set up only to own a home for a term. After that amount of time, the home and appreciation are owned by the trust for future distribution to beneficiaries. This requires that you give up ownership of your home; however, you can still use the home.
- Bypass trust. A certain amount of money is placed into a trust up to the estate tax exemption amount. One spouse can draw income from the trust so that the household doesn’t lose that income during their lifetime. Upon the death of that spouse, the trust assets pass to the heirs, free of estate taxes.
- Life insurance trust. With an irrevocable life insurance trust, people can place the proceeds from their life insurance policies in a trust that will go back to their estate, in order to avoid paying estate taxes on life insurance assets.
There are many other ways to help reduce estate taxes. Consulting with a knowledgeable Georgia estate planning attorney can help you determine which way you should set up your trust. Call the Law Offices of Shane Smith at 770-487-8999 to speak with a skilled Peachtree City estate planning lawyer today.