June 11, 2019
This is the third blog in a four-part series that focuses on estate planning.
An important component of providing for your loved ones often includes minimizing what goes to taxes. While taxes may not be the primary driver of your estate plan, considering your tax planning options can benefit both you and your beneficiaries.
Depending on your financial circumstances, the estate tax and generation-skipping transfer tax have the potential to significantly reduce your estate. Fortunately, there are a few strategies you can pursue to avoid paying more taxes than necessary.
The Tax Cuts and Jobs Act of 2017 increased the amount that individuals may give away during life and at death without triggering transfer tax. The new law offers several advantages, including:
Annual exclusion gifts are a simple but potentially powerful estate planning tool in that they allow you the flexibility to gift property when you can afford to do so. Key considerations for annual exclusion gifting include:
Without using your annual exclusion or lifetime exemption, you can pay for educational, dental and medical expenses (including health insurance premiums) for family members or friends as long as you pay the provider directly. This offers additional benefits for distributing assets during your lifetime, including:
Estate planning has many moving parts, and tax planning can be one of the more complicated aspects of the process. Working with an estate planning attorney and Certified Public Accountant (CPA) is often helpful to develop strategies to minimize your estate’s potential tax obligation. For more information, visit our Estate Planning Fundamentals resource page.
Becky Milliman is a senior wealth strategies professional and fiduciary representative for CIBC Private Wealth Management in Chicago, with 19 years of industry experience. In this role, she is responsible for the development of integrated wealth management plans for clients and provides the fiduciary administration for individual trusts and foundations. She also sits on the firm's Trust Discretionary Committee.
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