Estate Planning – Estate Tax Savings Options

Estate Tax Savings Options: For those people with estates larger than the then current estate tax exemption amount (the amount is currently $5 million), there are several options to choose from in terms of the type of Trust to use. A few examples are as follows:

A/B Trust – Establishes a plan which basically doubles the then current estate tax exemption amount before any estate taxes are due.

A/B/C or QTIP Trust – Same as an A/B Trust except that it provides additional protection should an estate be more than double the then current estate tax exemption amount.

Irrevocable Life Insurance Trust – A legal “Loophole” in the tax code allows life insurance that is purchased through an irrevocable trust to not be counted as part of a person’s estate. The Tax-free life insurance proceeds are often used in conjunction with a Charitable Trust.

Charitable Remainder Trust / Charitable Lead Trust – Two different approaches that can be used to maximize the tax-free return of money to an estate when assets age given to a charity. Taxes can be saved both during life time, as well as at death.

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