Can I Lower My California Estate Tax?

It is a common question for many people just starting the asset protection planning or estate planning process in California: how can I decrease my estate tax responsibilities in California? There are many ways to lower your tax obligations while also protecting assets for your family members and heirs.

Make sure that you have a consultation with a trusted estate planning lawyer in Pasadena to understand the value of faster action and minimizing your tax bill. Transferring assets outside of your estate is one way to minimize the tax responsibilities.

The creation of an irrevocable trust, for example, allows the owner of the estate to move assets outside of the estate and into the trust. The estate owner still remains the rightful owner of the assets until they pass away but then the estate documentation allows for the establishment of a successor trustee that takes over to manage all of the assets when the estate owner passes away.

An early transfer of asset ownership can also benefit your tax obligations. You can transfer ownership of real property or automobiles to heirs whenever you choose to do so. If the estate owner was diagnosed with dementia or Alzheimer’s, you can transfer the deed or title to another party so long as you have mental capacity to do so. Setting up trust funds is another way to incorporate the transfer of wealth to family members.

You have the right to add requirements to trust fund distributions to prevent the heir from squandering the money, such as limiting annual disbursements. Giving assets as gifts can also eliminate taxes entirely. An estate owner does not have to pay taxes on gifts that are given to heirs or other loved ones so long as the asset is considered a gift and meets annual gifting requirements.

For more help with your own California estate plan and to complete the documents needed to execute it, set up time to meet over the phone with a Pasadena, CA estate planning attorney.

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