While preparing an estate plan, you may be curious about the tax benefits. You aren’t alone if you are looking for a way to reduce your estate tax. If you form a domestic asset protection trust, you do take your assets out of your estate and hence can reduce your estate tax bill. This is not the only way, however. In fact, there are other ways to reduce your tax bill through estate planning. Here are some tax planning options for tax reduction.
Offshore Asset Protection
While many people look to domestic asset protection, you can also use offshore accounts. These are not options only for the wealthy either. You need to ensure that you are acting within U.S. law, however, if you plan to create an offshore account. Make sure that you report all of your assets to the IRS. Complete transparency is necessary when it comes to offshore asset protection.
Family Limited Partnerships
If you share any of your assets with your family, then you may want to consider a family limited partnership or FLP. An DLP allows you to transfer your assets to your children. You can do this without worrying about the taxes throughout the process. The assets transfer directly to your children.
Charitable donations can be a great estate planning tool. When you donate to charity, you reduce your taxes. In addition, you are supporting a cause. If you have any charities that you love to support, consider donations. In addition to charitable donations, you can also see tax reductions for gifting. Instead of putting all of your assets into a trust for your loved ones, consider gifting some of them. This can also be worthwhile for you. Instead of your loved ones inheriting a family heirloom or part of your estate after you die, you can share the moment with them. Not only will you be able to get a tax reduction, but you’ll be able to enjoy their surprise.
If you want to reduce your estate taxes, you can find a way through estate planning. In order to ensure that you have a valid estate plan, it helps to have a lawyer on your side to walk you through all of your options. He or she can tell you the valid and legal ways to reduce your tax bill. Contact an estate planning lawyer in Austin, TX, like Gray & Becker, P.C.,our office with all your questions regarding estate planning and administration.