Tax policies are in constant flux. If you are one of the money-smart Connecticut residents who are eyeing the changes, it could be a good idea to investigate asset transfer strategies.
Remove assets from your estate
You already know that you want your kids to have a property. If you give it to them while you are still alive, you remove equity from your estate’s overall worth. In this way, your property goes to the heirs, and the tax liability on the estate lessens.
This is typically a good option when you have several heirs and want to make sure that everyone gets what you intend with a minimum tax liability for anyone. After all, there is no gain when your child inherits your house but has to sell it to pay the inheritance taxes.
Give it all away
Perhaps the most radical way of planning your estate is to give everything away. Depending on the law at the time you take this step, it would allow you to give away property worth millions of dollars. Changing legislation defines your rights.
Some people choose to go halfway: They gift a part of their estate while selling the other portion. Concurrently, there is no sudden tax hit on the equity transfer and no capital gain either. Meeting with an attorney to create a plan for this can structure your fund receipts, which offers peace of mind in changing times.
Because asset transfer strategies as part of estate planning are complicated, it may be of tremendous benefit to meet with an attorney and discuss your plans. Your attorney may keep you updated on changes to the law so that you’re prepared when these changes take effect.