Strategies to Lower the Value of Your Estate

In a world where estate taxes can take a significant chunk out of your assets, it’s important to consider strategies to lower the value of your estate. One way to do this is by gifting assets to your loved ones. The annual gift tax exclusion for 2024 has increased to $18,000, allowing you to give up to this amount to as many people as you like each year without incurring any gift tax liabilities. Married couples can utilize gift-splitting to give up to $36,000 without facing taxes.

Additionally, funding a 529 or custodial account for children or grandchildren can also help reduce the value of your estate. Contributions to a 529 account are not considered part of your estate, and you can contribute up to $18,000 annually without triggering gift taxes. The SECURE 2.0 Act allows for up to $35,000 in 529 assets to be converted or deposited into a Roth IRA without facing tax penalties.

Charitable giving is another effective strategy to lower the value of your estate. By donating to qualified charities, you can receive tax deductions for the year of donation and potentially lower your estate value. Assets left to a qualified charity upon death are also deducted from your taxable estate.

Overall, these strategies can help you plan for the future and ensure that your assets are passed on to your loved ones in the most tax-efficient way possible. Consider speaking with a financial advisor to develop a comprehensive estate planning strategy that aligns with your goals and values.