Minimising Tax Liability On Death

Minimising Tax Liability on​ Death
When we die,​ most of​ us leave behind a​ fairly substantial and intricate web of​ assets and liabilities,​ including money,​ our home and our other possessions .​
in​ most jurisdictions,​ there arises a​ liability to​ tax on​ death that must be borne from the​ totality of​ the​ estate,​ and this can lead to​ a​ significant reduction of​ inheritance for our loved ones .​
Having said that,​ there are a​ number of​ ways in​ which liability to​ tax on​ death can be vastly reduced whilst still ensuring sufficient legacies and provisions mortis causa .​
in​ this article,​ we will look at​ some of​ the​ most salient ways in​ which one can seek to​ minimise his estate's liability to​ tax on​ death,​ and ways in​ which careful planning can help increase the​ legacies we leave behind.
Tax liability on​ death usually arises through bad inheritance planning,​ and a​ lack of​ legal consideration .​
Of course to​ a​ certain extent it​ is​ unavoidable,​ but with some care and consideration it​ is​ possible to​ reduce liability overall .​
There's absolutely no point in​ making legacies in​ a​ will which won't be fulfilled until after death and which haven't been properly considered in​ light of​ the​ relevant legal provisions .​
If you​ haven't done so already,​ it​ is​ extremely advisable to​ consult an​ attorney on​ minimising liability on​ death,​ and on​ effective estate planning to​ avoid these potential problems and to​ ensure your family are left with more in​ their pockets.
If you​ intend to​ leave legacies to​ family members of​ a​ specific quantity or​ nature,​ it​ may be wise to​ do so at​ least a​ decade before you​ die,​ which will ultimately divert any potential legal challenges upon death which would give rise to​ tax liability .​
Obviously there is​ seldom any way to​ tell precisely when you​ are going to​ die,​ but making legacies at​ least a​ decade beforehand avoids any liability that might be attached on​ death .​
in​ effect,​ donating during your lifetime well before you​ die means you​ can still provide for your family and friend without having to​ pay the​ corresponding tax bill.
Another good way to​ minimise tax liability is​ to​ get rid of​ assets during your lifetime by way of​ gifts to​ friends and family .​
One of​ the​ most effective ways to​ do this is​ to​ transfer your house to​ your children during your lifetime,​ or​ to​ move the​ house into a​ trust for which you​ are a​ beneficiary .​
This means you​ remain functionally the​ owner,​ but legally,​ the​ asset doesn't feature in​ your estate on​ death and therefore doesn't attract tax liability .​
Again,​ it​ is​ of​ great importance to​ ensure that the​ transfer is​ made well before death to​ avoid potential challenges and potential inclusion in​ the​ estate which would lead to​ inheritance tax liability.
Death is​ a​ particularly important phase in​ our lives,​ particularly in​ legal terms .​
the​ change between owning our own property and distributing ownerless property provides a​ range of​ challenges,​ and the​ controversial tax implications can cause serious problems .​
Without careful planning and an​ expert hand,​ it​ can be easy to​ amass a​ significant tax bill for your loved ones to​ bear .​
However,​ with the​ right direction,​ it​ can be easy to​ use the​ relevant mechanisms to​ minimise the​ potential liability to​ tax on​ your estate upon death.
Minimising Tax Liability On Death Minimising Tax Liability On Death Reviewed by Henda Yesti on June 25, 2018 Rating: 5

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