Reduce Your Estate Tax by Making Gifts

A person might want to consider using the annual gift tax of $13,000 to reduce a person’s total estate tax. Under this rule a taxpayer is allowed to gift annually a total of $13,000, with the limit that a person can give being $104,000. This applies to both spouses in a marriage separately. 

There are also numerous ways to avoid the gift tax if a taxpayer wants to avoid the gift tax:

• A taxpayer might want to consider paying for bills directly instead of gifting money to the person who has the bills.
• A taxpayer might want to try to use the Crummey Strategy to reduce the gift tax that a taxpayer would incur.

See Donald Jay Korn, How To Trim Your Taxable Estate By Gifting Assets, Investors, June 1, 2012.

Special thanks to Jim Hillhouse (Professional Legal Marketing (PLM, Inc.)) for bringing this article to my attention.