Currently, in the United States, you can transfer up to $11.7 million to heirs without having a federal income tax imposed. However, with the new administration, they are seeking to put limitations on estates, including reducing the $11.7 million to just $3.5 million and $1 million for gifts. The desire to pay one's fair share is evident in the new administration. This has been put on the back burner due to covid-19, but it will come up later. It's essential to plan tax strategies and other valuable tools to minimize the amount of taxes you could pay both at a federal and a state level. In this article, we review brilliant ways to transfer your wealth, avoid paying high taxes, and better establish your estate planning needs.

Buy Life Insurance Now- Irrevocable Trusts

Do you currently have insurance? Have you purchased some recently and wonder if it's enough? Buying life insurance is just half the battle. You need to have enough to cover your final expenses, those you leave behind, or to add to your generational wealth. One of the ways to better protect yourself and your family is to establish a life insurance irrevocable trust. By putting your life insurance in an irrevocable trust, you're effectively stopping the added expense of estate taxes. You'll also be able to avoid probate as trust immediately transfers upon death.

Move To A State Without Estate Tax

One of the ways the wealthy avoid having to pay estate taxes is by moving to a state that doesn't have them. If you reach the federal level for estate taxes, you may have to pay them, but you can avoid the hefty sum you would have to pay to your home state. Alaska, Florida, Nevada, New Hampshire, Texas, Tennessee, and Wyoming all have no estate or inheritance taxes. This is something to think about if you have a substantial amount of assets.

Irrevocable Trusts For Other Assets

The wealthy do not know precisely how to protect their wealth. One of the ways they do so is by establishing trusts. Trusts are a critical component to transferring your wealth without having to worry about many of the taxes imposed by state and federal governments. There are also excellent benefits to trust, including keeping privacy in your family, avoiding probate, and having a better distribution system for your assets after you pass away.

Final Thoughts

Getting started sooner, sooner than later with estate planning can't help you avoid specific fees and taxes while living. If you're searching for a better way to minimize your expenses, speak to an estate attorney today. They can best advise you as to how to properly plan as well as avoid hefty estate taxes.