Leaving money behind to the people that you love can be a satisfying thing, but many individuals have concerns about it as well. There is such a thing as being spoiled and getting too much too soon and this can have a negative impact on a person in a number of different ways. So, when you are planning your estate you may want to take steps that guide your younger family members toward a fruitful path, one that leads to the realization of their own full potential. And in fact, you can do this while gaining estate tax efficiency in the process.
The estate tax is unified with the gift tax, so the $5 million exclusion that you hear about involves both gifts and your estate. As a result, if you were to give $5 million in gifts during your lifetime free of taxation using this exemption, the entirety of your estate would be subject to the estate tax. So this exemption is not going to provide you with estate tax efficiency, but there are some other exemptions that can be quite useful to that end.
One of them allows each taxpayer to pick up college tuition costs (or the cost of any type of school tuition for that matter) as a gift free of the gift tax. When you do the research you find that the cost of higher education is rather staggering at the present time, especially at the more elite schools. So if you were to give your younger heirs gifts of tuition you could be providing them with a clear-cut path to long-term success while reducing your estate tax liability in the process.
If you are interested in learning more about how to implement this strategy as a part of your overall legacy plan, simply take a moment to arrange for a consultation with a dedicated and licensed estate planning lawyer.
Mr. Horowitz was awarded his Juris Doctor degree with honors from the University of Connecticut School of Law. While attending law school, Mr. Horowitz received the American Jurisprudence Award in Legal Ethics and the Nathan Burkan Award.
After graduation from law school, Mr. Horowitz continued his legal education at New York University School of Law where he received a Post Doctorate Law Degree in Taxation. He has also recently received a national achievement award.
Mr. Horowitz is admitted to practice before all the state courts in the State of Connecticut and the United States District Court.
Mr. Horowitz was selected for Super Lawyers in 2021, 2022 and 2023.
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