Received an inheritance of cash, investments, or property? Here are four ways that can help you keep it from being swallowed up by taxes.
Traditional estate planning tools, including trusts; Comments from estate-planning lawyer and accountant James Lange, regarding the use of an immediate annuity instead of a spendthrift trust; Recommendations for individuals who still own life-insurance; What individuals can do to avoid costly probate, ...
A gift in trust is a viable method to avoid taxes on gifts that exceed the annual gift tax exclusion limit. Gift givers can give gifts in excess of the annual exclusion without paying taxes by establishing a special type of trust, such as aCrummey trust. A gift to a Crummey trust allows...
If you get a phone call from someone claiming to be from the IRS, and you think you owe taxes, hang up and call the IRS at (800) 829-1040 or call your tax advisor. If you have no reason to think you’d owe any taxes, hang up and call to report the incident to the US Treasu...
Using Life Insurance Trusts to Avoid Taxation A second way to remove life insurance proceeds from your taxable estate is to create anirrevocable life insurance trust(ILIT). To complete an ownership transfer, you cannot be the trustee of the trust and you may not retainany rights to revoke the...
Traditional estate planning tools, including trusts; Comments from estate-planning lawyer and accountant James Lange, regarding the use of an immediate annuity instead of a spendthrift trust; Recommendations for individuals who still own life-insurance; What individuals can do to avoid costly probate, ...
While this type of trust protects assets from estate taxes on the death of the first spouse, the assets don’t become part of the surviving spouse’s estate, so they’ll be subject to taxes upon that spouse’s death. Qualified terminable interest property trusts ...
For example, municipal bonds are typically exempt from federal taxes, and in some cases receive preferential state tax treatment. On the other end of the spectrum, real estate investment trusts and bond interest are taxed as ordinary income. Sometimes, municipal bonds can improve after-tax returns...
The downside is that while a revocable trust will usually keep your assets out of probate if you were to die, you probably won’t escape estate taxes. “Revocable trusts are among the most common estate planning vehicles, particularly when there is a desire to avoid the costs and delays tha...
But those lucky few aside, most of us can postpone, reduce, or even entirely avoid paying taxes on our investment gains by using ISAs and pensions. We can also become knowledgeable about taxes on dividends and bond income, and hold our different assets in the mosttax-efficient way. ...