Three Effective Strategies to Protect Your Estate from Taxes

If you have millions of dollars, here are three ways to protect over 40% of your estate from taxes this year.

I'm Tyler. I'm a former financial advisor and portfolio manager. And now, I make financial content for free so that you don't have to pay for it.

1. Understand the Lifetime Gift Tax Exemption

The current lifetime gift tax exemption of $13.99 million is set to expire on January 1, 2026. After that date, it is set to drop to $7.2 million per person. Almost double that amount will be subject to a 40% estate tax and an additional 10% state tax in some cases. You could take your chances and do nothing, but if you like control or don’t have a good relationship with your kids, you might just keep your money.

2. Maximize Funding of an Irrevocable Trust

Consider maximizing the funding of an irrevocable trust. Together, you and your partner can protect $27.98 million. Over 30 years, that could potentially grow to more than $80 million. This approach allows you to have 100% estate tax-free money.

3. Hedge Your Bets

Alternatively, you could hedge your bets by having one parent fund the trust while the other parent retains control of the remaining assets. This way, you maintain some control while taking significantly less risk. Aim to protect a portion of the estate while still having access to your funds.

Remember, all of this takes time. If you're interested in learning more, sign up for my free newsletter. I’ll go over the numbers in greater detail this weekend.

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