Leaving an inheritance to your loved ones is a wonderful way to continue providing support for the people you care about after your departure. Unfortunately, even in death, taxes can still follow your assets and take a serious chunk out of the wealth you leave behind.

The good news is that you can reduce some estate taxes by utilizing the practice of gifting. Federal regulations allow you to gift up to $15,000 per person per year without facing certain taxes. If you’re unfamiliar with how gifting can reduce estate taxes, below is a brief overview:

Gifting Reduces the Size of Your Estate

Giving financial and property gifts to loved ones while you’re still alive can potentially reduce the size of your estate. This means that you can provide value to your loved ones while also reducing tax liabilities later. At the same time, you will be providing comfort and enjoyment to those you love, allowing them to receive money while you are still living that they can use to enrich their lives and the lives of others. To know more about reducing estate taxes in New York, visit this website.

There are rules to doing this legally, so you’re encouraged to partner with a local estate or tax attorney in your area for guidance. In New York, for example, you will want to look for an attorney who specializes in reducing estate taxes in New York specifically since each state has its own laws on how estates are handled after death.

Giving to Charity May Count Too

Although reducing estate taxes in New York and other states can be done by gifting to loved ones, you may also be able to gift property and assets to charity to reduce your estate taxes. Once again, different states have different laws surrounding this issue, so it is often best to work with an estate or tax attorney to clarify your obligations and restrictions.

Penalties for skirting estate tax laws can result in fines and fees as well as the potential for criminal charges in some cases. You may also face an audit by the Internal Revenue Service, further compounding the challenges you face.

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