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Can I Legally Avoid Inheritance Tax In The US ?
The estate tax in the US is a tax that is imposed on transfer of property of a deceased person. It could be through a will or according to state laws. |
It is one part of the Unified Gift and Estate Tax. The other part, the gift tax, is tax imposed on property that is transferred during a person’s life. Gift tax prevents evasion of estate tax.
In addition to the federal government, states also impose an estate tax, called either an estate tax or an inheritance tax. If an asset is left to a spouse or to charity, the tax does not apply.
Estate taxes have made many seek an outlet to legally adopt techniques to develop tax avoidance. Insurance companies have numerous life insurance agents who provide financial planning services for avoidance of payment of estate tax. Brokerage and financial planning firms also use estate planning, including estate tax avoidance, as a marketing ploy. Law firms too specialize in estate planning, tax avoidance and minimization of estate taxes.
What is generally done is the tax exemption limits for a husband and wife are combined either through a will or create a living trust. Other techniques do not avoid the tax but provide a practical way to have liquidity to pay the tax at the time of death. It is best to seek professional help when your primary wealth is a business you own, stocks or real estate. In doing so, one avoids a situation which compels heirs to sell these assets to meet their tax liability.
One popular scheme is where parents fund their children to buy life insurance on the parents in an irrevocable life insurance trust .If it is done this way life insurance is free of estate tax.
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Can I Legally Avoid Inheritance Tax In The Us ?
