Although none of us want to imagine the day we pass, financially preparing for this time is one of the best gifts you can give to your loved ones. Organizing your estate in a strategic way can drastically reduce the amount of taxes that your heirs are obliged to pay, leaving them with more money in their pockets.
Unfortunately, the larger your estate is, the more your beneficiaries will have to pay in taxes. An experienced financial advisor however, can help you prepare long in advance by allocating your resources to the right investment funds, expenditures, and account types with specialized tax mitigation services.
Our team of financial advisors at Miser Wealth Partners LLC are here to support the needs of clients by growing their wealth and easing future tax burdens for their heirs. Below we have provided a list of strategies that will help mitigate the total taxes owed on your estate.
Give money to heirs in the form of gifts
One of the simplest ways to reduce the amount of taxable income passed down to your beneficiaries is by giving them large sums of money each year in the form of gifts. In the United States, you can give beneficiaries up to approximately $15,000 per year, tax free. However, it should be noted that gifted money may be taxed if it is transferred to recipients in the last several years of an individual’s life. Therefore, if you have been diagnosed with a terminal illness and are in your final years, it may be appropriate to look into other strategies.
Donate to charity
Regularly donating to charity is not only a noble way to spend a portion of your income, but it is also a great strategy to reduce the amount of taxes that you will owe to the government. This is useful throughout the duration of an individual’s life, as well as after they have passed, and the estate is transferred to beneficiaries. If you have the financial flexibility to do so, we highly recommend donating a large sum of money to a charity of your choosing at least once per year.
Purchase life insurance
A life insurance policy is not only a guaranteed way to ensure your loved ones are left with something in the event of your death, but it can also be used strategically as a part of a well-planned estate. Unlike your income, compensation from life insurance is not taxable, meaning your beneficiaries will be provided with the total amount agreed upon in your policy. Therefore, even if you are sure your heirs will be left with a large estate, they will be better off financially if you use a portion of your income to pay a life insurance premium. As a result, your beneficiaries will have access to the remaining funds from your estate, as well as a high amount of tax-free compensation that can be released immediately upon your death.
Speak to a financial advisor
Many individuals make the mistake of hiring professional tax mitigation services too late in life. A professional service of this kind can help you make the right investments, maximize your income for a larger estate, and learn the best tax mitigation strategies based on your individual circumstances. At Miser Wealth Partners LLC, our team specializes in a range of financial services. We will ensure your estate is taxed at the lowest possible rate for the benefit of your heirs.
It is never too early to start thinking about how your beneficiaries can get the most out of your estate. Contact us today to find out how our tax mitigation services can help.
