Can I minimize my future Estate Tax?
Estate taxes can take a big bite out of what you would like to leave your heirs. Federal Estate taxes apply only to estates larger than $5,250,000 for the years 2013. There are several strategies you can pursue to reduce or eliminate the tax bite. Speak to your local CPA or attorney about these strategies. They may mention to you to consider making gifts. You can give up to $14,000 a year to as many people as you like, tax free. Together with your spouse, you can give up to $28,000 to each person. Also consider giving your life insurance policy to your wife, your child or put it in an irrevocable trust provided the assignment takes place more than 3 years before death. To keep the policy out of your estate, you cannot continue to pay the premiums. The new owner has to pay them. Another strategy is to get married. No estate tax is levied on property given to a spouse. Of course, whatever is left (over $5,250,000) will be taxed in your spouse's estate when he or she dies.
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