|
Strategy |
How it Works |
Key Advantage |
| Gifting |
You can give up to $10,000 a
year ($20,000 for a married couple) to an unlimited number of people
without triggering gift or estate taxes; unlimited if you pay
tuition or medical bills directly |
If you want to reduce your
estate by a small amount, there is no paperwork or trust agreements
to draw up. |
| Planned
Giving |
You donate cash or
appreciated securities to a qualified charitable organization (See
August newsletter) |
You can remove highly
appreciated assets from you estate, get an immediate tax deduction
and make donations over time. |
|
| Irrevocable Life Insurance
Trusts |
You place your life insurance
policy in an irrevocable trust; you may owe gift taxes when you fund
the trust and pay premiums (See July newsletter) |
The payout will be tax-free,
as long as you don't die within three years. |
|
Credit-Shelter
Trusts |
You and your spouse divide
your assets and bequeath property worth up to the estates-tax
exemption to these so-called bypass trusts. |
Allows each spouse to take
full advantage of the estate-tax exemption |
|
