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Avoid taxes through careful planning of estates

Even if a Camden resident has not yet created an estate plan for the disposition of his wealth after his death, it is likely that he has at least heard of the estate tax. Also known as the death tax, an estate tax imposes costs on the property and wealth a person has accumulated over the course of his life. Many people worry that the estate tax will deplete their wealth to the point that they will have little to give to their heirs and beneficiaries.

Careful estate planning can help people avoid this problem. There are a variety of legal methods that individuals can use to defer or avoid the estate tax, but each requires having foresight in order to preserve the estate's value when it is time for it to be administered. An attorney who works in the estate planning field can help interested parties investigate the following methods of working around the estate tax.

One way to defer paying the estate tax is for spouses to pass everything they own to each other. This method only works if one spouse predeceases the other. However, the surviving spouse will have estate tax obligations upon his or her passing since there is no spouse left to whom wealth can be passed.

If they are able, individuals can also reduce the other size of their estates by giving relatives gifts throughout their lifetimes. Individuals can gift a statutorily established amount of money each year to their kids and grandkids. By giving lifetime gifts instead of saving all gifting until after one's death reduces the size of an estate and therefore its ultimate tax obligations.

Trusts, partnerships and other legally created relationships can be other ways of transferring property to others in order to avoid estate tax payments. Depending upon the status and size of a person's estate, different options may be more appropriate than others. Legal professionals can help their clients evaluate estate planning options that preserve inheritance values for their clients' loved ones.

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