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What are the top wealth transfer planning strategies?

On Behalf of | Sep 22, 2022 | Estate Planning, Trusts |

A will isn’t the best way of transferring wealth in Connecticut. Assets must typically go through probate, which means they could be seized by creditors and winners of lawsuits. They would also take longer to land in the hands of your intended recipients. There are several other methods that you can use to transfer wealth.

Annual gifts

You could make annual gifts as one way of transferring your wealth and reducing your estate taxes. Connecticut provides a tax exemption of $9.1 million for annual gifts. The federal limit, however, is far lower at $16,000 annually. This limit is per person and could change with a new tax year to account for inflation.

529 plans

A 529 plan is an investment account for education that classifies contributions as gifts. You could make annual gifts to reduce your estate taxes while setting aside money for a loved one’s university expenses with this strategy.


If one of your beneficiaries is a minor, you could set up a UTMA for them. Transfers into this account count as gifts under estate planning law. Other assets besides money that you could deposit are real estate, artwork, patents and royalties. The beneficiary receives access to the account on their 18th birthday, and they don’t have to pay taxes on it up to a designated amount.


Trusts are one of the most popular asset transfer strategies. You could set them up in a way that beneficiaries can only withdraw a certain amount each year. Another limitation that you can put on the account is what types of expenses they can use the funds on.

There are two basic types of trusts: irrevocable and revocable. You can’t modify or cancel irrevocable trusts. The advantage that they have over revocable trusts is better tax benefits. Creditors and lawsuit winners also can’t touch the assets that are in this type of financial account. It’s a way of sheltering the wealth that you intend to pass on to your loved ones.

You could incorporate one or more of these wealth transfer planning strategies into your estate plan. They may help reduce your taxes and enable you to more securely pass on your assets.