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Tax Planning for Individuals

Complying with tax laws is important when you are alive; but being forward-thinking about tax ramifications on your estate after you die is equally important if you have a very large estate. To ensure that your beneficiaries receive the maximum amounts from your estate (without excessive taxes), make tax planning a priority right now. Don’t wait until it is too late.

Federal estate tax is currently enforced on estates valued at $5.45 million per person (estates amounting to less than this amount are not federally taxed). Colorado does not currently impose a state estate tax.

Federal and/or state taxes can be enforced on:

  • Investment properties
  • Real estate
  • Stock
  • 401K plans
  • Traditional IRAs
  • And more

Ways to Avoid or Minimize Estate Taxes

  • Convert your traditional IRA to a non-taxable Roth account
  • Set up a trust, instead of a will, to eliminate the estate from being subject to estate taxes (there are situations when a trust must pay taxes while you are living such as interest or dividend income)
  • Give money to beneficiaries as gifts while you are alive to reduce your estate value (there is a $14,000 limit per person, per year)
  • Give money to charitable organizations as gifts while you are alive to reduce your estate value
  • Set up an Irrevocable Life Insurance Trust (ILIT) to make the ILIT the owner of your life insurance policy so that value is removed from your estate
  • Set up a Qualified Personal Residence Trust (QPRT) to transfer ownership of your home to the QPRT so its value is removed from your estate (after a certain period of time, the home is transferred to the beneficiaries you designate)
  • Set up a Limited Liability Company or Family Limited Partnership to transfer assets to your beneficiaries

There are many more ways to protect your estate from taxes after you pass away. The Denver estate planning lawyers at The Brown Law Firm LLC are highly experienced in this area of estate planning and can help you navigate this complicated process. Contact us at (303) 339-3750 or send us a message online to arrange a meeting and discuss what methods might be right for your unique situation.