Inheritance tax is something people rarely think about until they are beneficiaries of part of a Will or trust. The government can take a large portion (up to 45%) of a deceased person’s estate. There are, however, ways to avoid paying too much inheritance tax. Estate planning attorneys in New Jersey, SCC Legal, lists a few options:
Second-to-die life insurance
When combined with an irrevocable life insurance trust, second-to-die life insurance ensures your wealth and assets are passed on to your spouse or children without the beneficiaries having to pay inheritance tax. The costs associated with this option include attorney fees (who will set up the trust) as well as insurance premiums (which will vary depending on the health and age of the owner).
Grantor retained annuity trust
The donor of a granted retained annuity trust will need to pay annual payments for this trust. After the term of this trust ends, the money remaining will be allocated to the beneficiary as a tax-free gift.
You can avoid paying inheritance tax by giving away part of your wealth during your lifetime. Gifts that are known as ‘potentially exempt transfers’ are generally made to people (not companies or trusts), charities, educational institutions and so forth.
Get affordable, current advice from a leading elder law attorney in New Jersey
If you have worked your entire life and have built up wealth and assets, it’s your duty to make sure this wealth gets passed on to the next generation without them being crushed by inheritance taxes.
Frank R. Campisano is an elder law attorney in New Jersey that specializes in all aspects relating to estate planning and inheritance tax. When you book a consultation with Frank, you will get up-to-date, affordable and uncomplicated advice. Be proactive about your estate planning in order to avoid paying too much inheritance tax. Contact us for more information today.