One of the reasons a Florida resident should strongly consider completing an estate plan is that it's an effective way to lower potential estate taxes faced by heirs. Someone who intends to leave substantial assets to their heirs should consult with an estate planning professional who can develop wise tax strategies.
One way to lower estate taxes is to use the annual gift tax exclusion. Each individual in the United States can give away as much as $15,000 in assets annually without triggering gift taxes. There is also the $11.2 million lifetime estate tax exemption. An individual can use the exclusion and exemption to remove certain assets from their estate during the course of their life. This will reduce the amount of estate taxes that will have to be paid by heirs.
An individual who has charitable causes that they hold dear can allocate assets for these causes and reduce estate taxes at the same time. A charitable lead trust can be used to give away over $15,000 each year. This type of trust is particularly beneficial for estates that have appreciated assets that hold a low basis.
An individual can use a CLT to issue fixed annuity payments to a charitable entity for a specific number of years. After the period of disbursement is over or after the estate owner dies, the remaining assets in the trust will be transferred to the beneficiaries. One can also use a CLT to reduce the amount of their income taxes by claiming a tax deduction in the year that they fund the trust.
An estate planning attorney may explain strategies to use to lower estate taxes. Lowering potential taxes is a major benefit of a thorough estate plan.