💸 How to Minimize Estate Taxes with Smart Planning
If you’ve built a successful career or business, estate taxes may be one of your biggest future liabilities. And with the federal estate tax exemption set to drop in 2026, now is the time to get ahead of the curve.
The good news? With the right legal tools and strategies, you can protect your wealth, support your loved ones, and reduce or eliminate estate tax exposure.
This guide breaks down what estate taxes are, who’s at risk, and the most effective ways to minimize what the government takes—legally and efficiently.
🏛️ What Are Estate Taxes?
Estate taxes are levied on the transfer of wealth after someone dies. They’re based on the total value of your estate—including real estate, investment accounts, business interests, retirement funds, and life insurance proceeds.
2024 Federal Estate Tax Basics:
Federal exemption: $13.61 million per person
Married couples can combine exemptions: $27.22 million
Anything above is taxed at 40%
But here’s the catch: The exemption is scheduled to drop by half in 2026, meaning many families who aren’t taxable today will be tomorrow.
Do State Estate Taxes Apply?
Yes—in some states. Several states have their own estate or inheritance tax [ARIZONA does NOT] with much lower exemption thresholds (as low as $1 million).
Check your state’s rules, especially if you own property in multiple states.
Who Should Be Thinking About Estate Taxes?
You may be at risk if you:
Own real estate in high-cost areas
Have a successful medical or dental practice
Built a closely held business
Hold multiple retirement accounts or investment portfolios
Expect to inherit wealth from parents or relatives
✅ Smart Estate Tax Minimization Strategies
1. Use the Lifetime Gift Tax Exemption (Before 2026)
You can currently gift up to $13.61 million tax-free during your life—but after 2025, that number could be cut in half.
Strategy:
Make large lifetime gifts now to lock in the higher exemption
Use Spousal Lifetime Access Trusts (SLATs) to keep control while removing assets from your estate
2. Annual Tax-Free Gifting
You can gift up to $18,000 per person per year (as of 2024) without touching your lifetime exemption.
Strategy:
Spread wealth gradually to kids or grandkids
Fund education or healthcare costs (tax-free if paid directly to the provider)
3. Use Irrevocable Trusts
Certain trusts remove assets from your taxable estate while allowing continued benefit to your family.
Popular types include:
Irrevocable Life Insurance Trusts (ILITs)
Grantor Retained Annuity Trusts (GRATs)
Qualified Personal Residence Trusts (QPRTs)
Dynasty Trusts (multi-generational planning)
-Each has specific tax advantages depending on your goals.
4. Transfer Business Interests Strategically
If you own a business or practice:
Consider using Family Limited Partnerships (FLPs)
Gift non-controlling interests to family at a discounted valuation
Freeze growth with GRATs or Defective Grantor Trusts
-Valuation and timing are critical—consult your estate attorney and CPA.
5. Charitable Giving
Charitable strategies help reduce estate taxes and support causes you care about.
Tools include:
Charitable Remainder Trusts (CRTs)
Donor-Advised Funds (DAFs)
Direct bequests in your will or trust
6. Portability and Exemption Planning for Couples
Married couples should:
Use portability elections to preserve the deceased spouse’s exemption
Consider credit shelter trusts for long-term planning
Review existing plans to ensure marital and non-marital trust balances
🧠 Final Thoughts
If your estate may exceed $6 million (or $12M as a couple) by 2026, it’s time to act.
Smart estate tax planning isn’t about avoiding taxes—it’s about being strategic, protecting your legacy, and preserving more for your family.
Want to know where your estate stands and how to reduce your tax exposure? Let’s create a custom plan that keeps more of your wealth where it belongs.
Hurley Law Group
Estate & Tax Planning for Professionals and Business Owners
📞 308-383-1867
🌐 hurleylawgroup.com
✉️ eric@hurleylawgroup.com