Selling Northern Michigan Real Estate And Saving Taxes
Life Insurance Can Be The Most Cost Effective Financial Tool To Pass The Wealth Of Your Estate To Your Heirs
For tax year 2011 the Estate Tax is 55% for estates valued over $1 million. The tax must be paid when the assets are transferred after the second spouse dies and the remaining heirs receive the estate. Estate planning is essential to preserve your loved ones inheritance.
Executing a will and trust may be effective financial tools to use to disinherit the IRS.
The purchase of Life Insurance to pay the estate taxes is an effective alternative to saving thousands of dollars to pay the tax bills. In most cases life insurance is tax free and provides your family with the liquidity that is needed when a family member dies and the bills become due, not to mention the need of funds for day to day living.
For families that have have wealth that that their children may inherit, another great financial tool to use is the Gift Tax Exclusion. Individuals may gift $13,000 annually and married couples $26,000 annually. This is tax free to the donee. The lifetime Gift Tax Exemption is $1 million for individuals and $2 million for married couples. Over the course of ones life a parent can use this an effective tool to pass wealth to the people they love.
The above commentary is for educational purposes only and is not intended to constitute legal, tax, accounting, or investment advice. You should consult your attorney for specific advice on your estate.
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