What are the Best Ways to Protect Your Inheritance from Taxes?
Nashua, NH Resident Needs Help
If the property and other inheritance is below a certain dollar threshold, this will not be taxed. The estate tax can be up to 40% of the value of the inheritance, depending on how much the inheritance totals. In the United States this threshold is just over $11.5 million. One way to avoid having your loved ones pay exorbitant taxes on their inheritance is by giving away your assets prior to your death. $15,000 can be gifted each year to an individual without paying tax.
The last thing a Nashua resident wanted was for his heirs to be stuck with a huge chunk of their inheritance taken out as a result of taxes. Looking for help, he contacted the tax professionals at Merrimack Tax Associates.
Plan Ahead with a Will or Trust
By making a will you can be sure that all of your assets will be distributed in accordance of your wishes. A will can ensure that this money, irrelevant of taxes, is being divvied up as you wanted. Trusts, which are similar to wills, often let you avoid state probate requirements and additional expenses that can be associated with this.
If Over the Threshold, Gift or Spend Some of Your Assets
When your cash and property are calculated if the total is close to the threshold now may be a good time to spend some of your assets. This will actually save your loved ones down the road, avoiding the 40% inheritance tax. Whether planning that dream trip or just living more extravagantly, spending more in your seniors may be the right decision.
The Nashua resident was able to get a better understanding of how to plan for his loved one’s inheritance after speaking with Merrimack Tax Associates. He made some important changes and can now rest easy that his family will be taken care of in the future.