Berman & Asbel, LLP

Avoiding estate tax

Pennsylvania fans of the late actor James Gandolfini may have heard that due to his lack of proper planning, most of his estate, valued at about $70 million, was subject to estate taxes after he passed away. However, individuals can plan ahead to avoid estate tax, and irrevocable charitable trusts are one way of doing this.

With a charitable remainder unitrust, an individual or other income beneficiaries can draw an income from the trust while committing to ultimately passing the assets to a charity. This type of trust allows the individual to avoid capital gains tax while selling assets. The assets placed in the trust may be of any type including collectibles, real estate and stocks. After a specified period of time, the assets pass to the charity.

A charitable lead trust distributes income to the charity and then returns the property to the donor or beneficiary after a certain amount of time. The donor pays tax on the income interest that goes to charity but receives a tax deduction as well. The idea behind a charitable lead trust is to reduce the value of the assets so that estate taxes will be lower as well.

People may resist having conversations with family about estate planning, but doing so is important regardless of the size of the estate. In the absence of a will, the state distributes a decedent's assets in accordance with intestacy laws, which may not be in accordance with what the decedent would have wanted. Even a person with an existing will may want to have it periodically reviewed by an attorney and updated if a change in family or financial circumstances warrants it.

No Comments

Leave a comment
Comment Information
Email Us For A Response

Contact Us

Bold labels are required.

Contact Information

The use of the Internet or this form for communication with the firm or any individual member of the firm does not establish an attorney-client relationship. Confidential or time-sensitive information should not be sent through this form.


Privacy Policy

attorney image