The estate tax is a tax on the transfer of property after someone dies. This tax can be quite costly, so it’s important to understand when you’re liable for it. There are a handful of situations in which you might not have to pay estate tax. This is based on the value of your estate and who you leave it to. If you’re wondering whether or not you’ll have to pay, it’s important to consult with an estate planning lawyer. They can help guide you through the process and let you know what to expect.
Many people get confused when it comes to inheritance taxes and estate taxes. The thing to remember here is that inheritance tax is what you will get for example, if you are the person who inherits someone’s estate and what taxes you have to pay when you receive it. Estate tax on the other hand is the money that is taken out of anyone’s estate when they die. If it is your intention to leave a considerable sum of money or assets to a member of your family then this is something that you really do need to think about because if you don’t do it right, a great deal of money could go to the government.
You would be forgiven for not knowing the ins and outs of the estate tax, but thankfully you can turn to the professionals such as the ones from https://vizecounselor.com/. They can give you all of the advice that you could possibly need. Obviously, you want to stay within the confines of the law of your country, but you want to be able to exploit some legal loopholes in estate tax and so the following are some situations where estate tax may not be applicable.
- To Give It As A Gift – This is a way to not pay estate tax because you could give part of your wealth in the form of a gift to your immediate family members. There are certain rules that need to be followed in this regard but your government will allow a maximum amount of money every single year that you can give to a family member that will be tax-free. The good news is that you are not limited to the number of people that you can give this money and so if you do it properly, you won’t have any money left when you die.
- Donate To Charities – You always promised yourself that you would donate money to charities but you never really got around to doing it, and so this provides you with the perfect opportunity to bypass the estate tax altogether and to give some or all of your wealth to charity. It is possible to set up some kind of charitable trust; you can keep all of your assets in this and they will go to your nominated charity on your death.
- Create A Life Insurance Trust – For this to work properly, you need to take out some kind of life insurance, but you also want to make sure that the proceeds of the policy when it pays out are not taxed. What you need to do is to set up a trust that changes ownership of your life insurance policy over to one of your beneficiaries. This leaves you to start enjoying all of your vacation time without worrying.
These are three ways in which you can avoid paying any estate tax and there are a few more. The best thing to do is to talk to some kind of financial adviser or counselor to find out exactly what it is that you can do to restrict the amount of money that you pay out in estate taxes.