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May 28, 2008 9:10 am US/Pacific

Avoiding Estate Taxes

QUESTION:   What can I do to make sure my kids get as much of their inheritance as possible instead of paying a huge amount of tax?

ANSWER:  Depending on the year in which you pass on, your kids may not pay any estate taxes. For instance, the 2008 estate tax exclusion
is $2,000,000 or $4,000,000 per couple. In escalates over the coming two years, until 2011 when it reverts back to $1,000,000 or $2,000,000 per couple. However, accounts such as IRAs will always have taxes due upon distributing the assets, unless the beneficiary is a charitable organization. If your estate is greater than $100,000 outside of retirement accounts, and especially if you have any real estate, I would suggest sitting down with an estate planning attorney to determine if you have a need for a trust. A trust will allow for an easier transition of your assets to your heirs without the hassle of probate.

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Money Matters is provided by:

David Schauer, CFA, MSFA, CFP®
Financial Planner
Hanson McClain
E-mail questions to moneymatters@kovr.com

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