The easiest way to avoid inheritance tax is to give your cash and assets away while you are still alive. Avoiding tax liability can be done if you give away a certain amount while you’re still here to give it away.

You can make these gifts and donations to family members, charities, and political parties. You can gift money to your children for their wedding, tax free, as well as to your spouse. There are limits on the amounts each year. If you leave all of your assets to your spouse in the event of your death you can avoid inheritance tax completely.

Important to Remember

If you have left your estate to your spouse, your children will be responsible for paying the inheritance tax upon their death so planning is recommended. The gifts cannot adversely affect your normal standard of living and must be made out of regular income.

Planning

When planning on reducing your estate you must be careful with how much you give. It is important to give small amounts to a large number of people. You may also give large gifts as wedding presents to your children and making donations to charitable organizations. A will is important to have to make sure all of your assets are divided up properly so that one person does not end up paying taxes on all of your assets.

If you plan on leaving any stocks to your children or spouse, then you will need to have an inheritance tax waiver. This waiver will transfer these stocks and they can avoid paying the inheritance tax on them. Whoever receives the stocks will be responsible for the tax on them.

For more information on how to avoid federal inheritance tax liability, please visit TurboTax Online. TurboTax online offers free information and free tax calculators.