When you work on your California estate plan, chances are, you do so with the goal of maximizing how much of your wealth you will be able to leave behind for your loved ones after your passing. If you have a particularly high net worth, though, and the value of your estate exceeds a certain figure, you will have to pay a federal estate tax, and it could potentially eat up as much as 40% of your estate. Adam Diran Attorney at Law recognizes that there are estate planning steps you can take now that can lower your estate tax burden, and we have helped many people navigate this and similar estate planning issues.
Per U.S. News & World Report, reducing your estate tax burden allows you to preserve more of the wealth you worked hard to build so that it can go toward the people or causes you care about most. Often, people facing similar circumstances who are looking to reduce the amount of money they lose to estate taxes find that placing some assets into trusts helps them achieve this goal.
How? By moving assets into certain types of trusts, you are transferring them out of your possession and ownership and giving control over them to your trustee. In doing so, though, you are making it so the value of those assets does not tack on to the overall value of your estate, thereby reducing how much tax the government will assess against it.
Another, arguably simpler, method of potentially reducing your estate tax burden involves starting to give away some of your wealth now. The less you have in your estate when you pass, the less your loved ones will lose to estate taxes, so this is an effective way to reduce your overall estate tax burden. You can find more on this topic on our webpage.