Ways to Avoid Estate Tax

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Inheritance taxes and death taxes are basically the same thing as estate taxes. They are a tax imposed by the government, and generally speaking, they have nothing to do with probate. If you don't have a big estate, you don't have to worry about paying estate tax.Even larger estates usually don't have to pay estate taxes, because there are a number of legal tools that can help eliminate any estate taxes actually payable.If you pay estate taxes, you are voluntarily paying them, because if you plan for them, you don't have to pay them.The rich protect themselves, so when a family member dies, they don't pay any estate taxes. Why shouldn't you protect yourself?
Every dime of a deceased person's estate is actually subject to the estate tax and a tax is levied.Even though a tax is imposed, most people don't actually pay any tax, because everybody is given a credit to offset a specific amount of the estate tax imposed. The exact amount of property an individual can pass without paying an estate tax changes quite frequently. It is actually the credit amount that changes and not the estate tax rates and brackets.

The credit can be used to offset either a gift tax or an estate tax, which are a "unified tax" under the IRS Code, thus it is known as the "unified credit."If the unified credit can be used to offset either a gift tax or an estate tax liability, it can also be used to offset a combination of the two taxes.When you want to know what the unified credit amount actually is, you will have to look it up, because it changes too often to make any assumptions.The amount of property that generates an estate tax equivalent to the amount of unified credit available to offset the estate tax is called the "exemption equivalent." People often say, "You can pass $2 million without an estate tax." They are really saying that the unified credit will offset the tax generated by the first $2 million in property passed through a gift or estate inheritance.

Lots of people are surprised to learn they actually have a taxable estate, because the estate includes the assets like the retirement accounts, stocks, bonds, little business, life insurance face values, and of course, all of the real estate.In almost all estates, life insurance is included in the estate evaluation, and it is subject to the estate tax.With inflation ballooning estate values, many families are surprised to find out that there will actually be some estate tax paid when mom or dad die. The estate tax rate on the first dollar, where there is actually an estate tax payable, is close to 50%. If there is an estate that is only $500,000 above the exemption equivalent, the payable estate tax will be on the order of $250,000.So what if you pay the attorney his $10,000. If you can get an extra $250,000 to your family, it is money well spent.

Using Lee R. Phillips' new book, Guaranteed Millionaire, and his FREE DVD, Using the Law to Make Money and Protect Your Assets, you will know how to move your live insurance out of the estate tax trap.With the book and DVD, you will learn how a couple can use a trust to move twice as much property to their heirs with having any estate tax issues.If you don't eliminate your estate tax problems by removing your life insurance from your estate and getting twice as much property out to the family without an estate tax, there are a number of other legal tools an attorney can use to eliminate estate taxes.Some of the other options you have are Family Limited Partnerships, Corporations, and LLCs. These and other tools are exposed in detail in the FREE DVD and book. They let you eliminate estate taxes and get a ton of asset protection.Order Guaranteed Millionaire and the FREE DVD, Using the Law to Make Money and Protect Your Assets, now.

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