When you work on your Michigan estate plan, chances are, you do so with the intent of leaving as much of your wealth behind for your loved ones, or the causes you care about, as you possibly can. One effective method of doing this involves reducing the amount of tax assessed against your estate, and there are several different methods you can utilize to help do this. At Bingham Legal Group PC, we are well-versed in the various methods of reducing estate tax, and we have helped many clients navigate this and related estate planning objectives.
According to U.S. News & World Report, one of the most effective methods available to you in terms of reducing estate tax involves placing some of your assets into trusts, rather than leaving them behind in a traditional will. Why? Once you place assets in a trust, they become the official property of your trustee, rather than yourself, meaning they do not come into play when assessing the overall worth of your estate. Trusts come in a variety of different types, so some types of trusts may better suit your unique needs than others.
Another effective method of lowering your estate tax obligation involves starting to give away some of your legacy now. Maybe you have adult children who could use your money more now than in, say, 25 years, or maybe you have charitable causes of relevance to you, and you want to make sure as much of your wealth goes to them as possible. Regardless of how you decide to distribute your wealth, doing so now can reduce the amount of tax assessed on your estate.
A third way you may be able to lower your estate tax burden is to, through an irrevocable trust, purchase an extra life insurance policy to cover the amount you anticipate losing in estate tax. You can find out more about estate planning on our webpage.