Developing a Watertight Estate to Secure Your Legacy

Legacy Estate
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The U.S. government has been through a process of softening inheritance tax regulations, but strict regulations remain in place. According to IRS rules, any assets over $11.4m are subject to estate tax of varying rates. With such a heavy rate placed on your assets, it’s important to make choices throughout life that will mean your estate is legally protected against damage, and will provide a proper legacy for your descendants to enjoy.

Creating solid investments

Estate tax will take place around the time of the inheritance being handed down, but at no further date from then. Accordingly, if you can secure your estate – or some portion of it – in investments, this will benefit your family by allowing the Personal Representative or Successor Trustee to continue to accrue money via the return on investment. This is the approach favored by investors including Berkshire Hathaway and metals exchange experts Moneymetals.com, who have outlined the continual appreciation of gold values and their value in estates. The recipients of your estate will also benefit from a greater amount of leeway from the IRS through this method, and your investments will continue to gain value above what are typically low interest rates, according to money management website The Balance. All of this is routine legal practice and a secure way of managing your money.

Giving to charity – throughout life

Being charitable is already a good thing through the benefits it will bring to those less fortunate than yourself. What lifelong also does is give you a completely legal way of generating a tax deduction. Currently, you can transfer up to $15,000, per person, per year, before gift tax is accrued and reduces your estate. It’s worth noting that the figure of $15,000 will remain the same this year, even as total estate tax allowance increases, according to Forbes. If you have relatives who can be trusted with money during your lifetime, or can be directed into savings and investments, continuous charitable dispensation of your funds will generate a considerable tax benefit to offset against any future estate tax.

Irrevocable trust plans

A final and more permanent way of protecting your estate is presented through the irrevocable estate. As opposed to the recoverable estate, where you have the opportunity to regain ownership of any assets placed into it, the irrevocable trust is effectively a ‘hands wiped clean’ vehicle in which you are no longer allowed any access or say over the funds. The benefit of this is that, as you are technically not connected to said trust, you are available to avoid any estate tax. This is a great option if you have a well prepared family or board of independent trustees who will be able to execute the fund properly.

Your life’s career can, and should, be protected for the benefit of your children and extended family. The rules on estate tax are fairly generous, but you can always achieve more through legal means. Re-assess your estate today and see where you could improve.

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