For most people across California, one of their main objectives when working on their estate plans involves figuring out how to leave as much of the wealth they have amassed behind for their loved ones as possible. At the Law Office of Stephen W. Penn, we understand that there are several different steps you can take to accomplish this, one of which involves reducing the amount of tax assessed against your estate after your passing.
So, how can you go about reducing your estate tax burden? According to U.S. News & World Report, the government can take a substantial portion of your estate after you pass. While this may not impact you directly, it does reduce the amount you are able to leave behind for your children or other loved ones. There are, however, certain measures you can employ to reduce the percentage of your estate lost to estate taxes, and one such measure involves establishing a trust.
Trusts come in a range of different formats that can help you achieve different objectives, but trusts offer some important key benefits, one of which is protection for certain assets from taxation. In other words, the assets in your trusts are not, in actuality, a part of your taxable estate, so you can place assets in them safely, thereby lowering your estate tax burden.
Another simple method of reducing your estate tax burden involves starting to give away some of the wealth you have amassed before you die. When it is not part of your estate, it will not factor into its overall value, which in turn reduces the amount your loved ones will lose to taxes. You can learn more about estate planning on our webpage.