By using multiple wills, individuals such as estate owners may be able to reduce or even avoid the taxes on their estate, based on what the will stipulates. Although this method sometimes puts individuals in difficulty, it is often used as a way to reduce the amount of taxes that have to be paid for assets or property.
How Can It Help Reduce Taxes
By using several wills in order to break up an estate, the owner may effectively reduce or even avoid taxation when the property is passed down. This is often used along with other documents that prevent much of the monetary value from transferring from the estate to the heir. These are either in form of additional wills or documents that hide certain aspects from taxation. Through careful planning, an individual may be able to keep the estate intact after death, however, this requires additional methods to be used in conjunction with the multiple wills.
Secondary Methods That May Be Used
There are several methods that are usually used in order to fully protect an estate from taxation, however, the most often encountered one is the passing of the business to another person or trust. There are also cases where the estate owner has gifted considerable amounts of money to their spouse or an individual from outside the family.
Alternatively, some prefer to transfer large chunks of the estate to dependents, such as underage children. In this case, they would become the owners, however, the property would be financially locked down until they would be old enough to administer it. This is also one of the safest methods, simply because most states have laws that are designed to protect the inheritance of minors until they are old enough to legally take possession of it.
It is also possible for the estate owner to hire a director whose job is to find ways to bypass state laws by using a will through which to designate what each family member will receive.
Hiring a Lawyer to Help with the Will
For the most part, estate owners prefer to hire one or more lawyers to draft, create, and help enforce the wills. This is an essential step that must be taken in order to ensure that all of the wills are valid and that there are no contradictions between them. Depending on the size of the estate and on the complexity of the methods used to avoid taxation, owners may either hire a lawyer, or an entire law firm that has the sole purpose of ensuring that the property is properly passed down when they die.
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