Created on 14 June 2013 Last Updated on 14 June 2013
Minnesota taxes estates over $1 million
How do you avoid estate tax? The key is to own less at death than the estate tax exemptions. Remember estates are taxed at the federal and state level. For decedents dying in 2013, $5.25 million can pass untaxed by federal estate tax at death, however, Minnesota taxes estates over $1 million. One way to ensure that your estate is under those limits is to make lifetime gifts.
Four kinds of gifts can be made to reduce your estate taxes and without triggering a gift tax return.
- gifts to qualified charities
- gifts to pay for another?s tuition at qualified educational institutions
- gifts to pay for another?s qualified medical expenses
- annual exclusion gifts of no more than $14,000 per person per year (with the exception that an individual may gift five times the current annual exclusion in a single calendar year to a 529 College Savings Plan).
A husband and wife can combine their annual exclusions and can give $28,000 to a number of persons each year. Using these techniques, a couple may gift thousands through annual exclusion gifting. Substantial lifetime gifting can reduce the size of your taxable estate, but it is important to consider the income tax consequences of gifting, the impact on lifestyle, and potential long-term care costs. It is best to rely on an attorney, accountant, and financial advisor in the planning.
Source: http://www.elderlawlawyermn.com/plymouth-lawyer-suggests-protect-your-assets-from-estate-taxes/
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