As a Georgia resident who worked hard to be able to leave a legacy behind for your loved ones, you may be looking for ways to maximize how much your beneficiaries stand to gain after your death. If your assets are substantial enough, you may have to pay estate taxes. However, there are a number of methods you may use that should help diminish your estate tax burden.
According to SmartAsset, you may want to use the following three methods to reduce how much your beneficiaries lose to estate taxes after your death.
Method 1 – Purchase life insurance
Setting up an irrevocable life insurance trust gives you a way to lower your estate tax burden. Once you create the trust, you transfer ownership of it to someone else. In doing so, you protect those life insurance proceeds from taxation.
Method 2 – Donate to charity
If you are near the cusp of having to pay estate taxes, you may want to consider giving away some of your money to charity through a trust. You may decide to do so through a charitable lead trust or a charitable remainder trust. In doing so, you lower the overall value of your estate.
Method 3 – Give some of your wealth away now
There are limits on how much you may give away as gifts during each tax year without having to pay taxes on those gifts. However, if you start early and give away as much as possible each year, this may help you avoid estate taxes.
Not everyone has to worry about estate taxes. If you do, though, know that these are some, but not all, of the potential ways to reduce the value of your estate and, possibly, avoid estate taxes altogether.