{"id":287011,"date":"2016-04-04T10:45:46","date_gmt":"2016-04-04T15:45:46","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-law\/estate\/planning-an-estate\/10-ways-to-reduce-estate-taxes.html"},"modified":"2025-08-29T11:00:00","modified_gmt":"2025-08-29T16:00:00","slug":"10-ways-to-reduce-estate-taxes","status":"publish","type":"page","link":"https:\/\/www.findlaw.com\/estate\/planning-an-estate\/10-ways-to-reduce-estate-taxes.html","title":{"rendered":"10 Ways To Reduce Estate Taxes"},"content":{"rendered":"\n
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10 Ways To Reduce Estate Taxes<\/h1>\n\n
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\n By Oni Harton, J.D.<\/a> | Legally reviewed by Catherine Hodder, Esq.<\/a>\n | Last updated\n
\n \n <\/i>\n Legally Reviewed\n <\/summary>\n\n
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This article has been written and reviewed for legal accuracy, clarity, and style by FindLaw\u2019s team of legal writers and attorneys<\/a> and in accordance with our editorial standards<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n\n

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The last updated date refers to the last time this article was reviewed by FindLaw or one of our contributing authors<\/a>. We make every effort to keep our articles updated. For information regarding a specific legal issue affecting you, please contact an attorney in your area<\/a>.<\/em><\/p>\n\n <\/div>\n <\/details>\n<\/section>\n\n\n

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Reducing estate taxes means planning ahead to lower the value of what you leave behind so less is taxed. Common ways include leaving assets to a spouse tax-free, making yearly gifts within the allowed limit, using trusts (like life insurance or home trusts), giving to charity, and using special rules for valuing certain property.<\/p>\n\n <\/div>\n\n\n\n

The federal estate tax can be reduced using a variety of legitimate\u00a0estate planning<\/a>\u00a0techniques.<\/p>\n

Tax planning is an estate planning technique used to reduce the total value of an estate. This step, in turn, decreases an estate’s tax burden. Steps taken during the tax planning process can reduce or even eliminate the federal estate tax and any other estate tax liability.<\/p>\n

Estate tax planning<\/a> is beneficial. It can reduce assets that are part of your estate today and sometimes have beneficial tax implications during your lifetime.<\/p>\n

Planning techniques include using your federal estate tax exemption and making charitable donations. These steps can go a long way toward reducing your tax liability during the probate process.<\/p>\n

Here are ten common methods to minimize estate taxes for your estate upon your death.<\/p>\n

1. Marital Transfers<\/h2>\n

Neither lifetime gifts nor bequests in a will are subject to estate taxes if these assets transfer to a surviving spouse. The exception is if the spouse is not a U.S. citizen.<\/p>\n

The marital transfer estate tax exemption can defer payments owed to the IRS. The exemption does not eliminate estate taxes, though. It only puts off the tax bill the estate may face.<\/p>\n

When the second spouse dies, the estate owes taxes on the entire taxable estate. This includes the assets transferred upon the first spouse’s death.<\/p>\n

2. Lifetime Gifts to Children and Grandchildren<\/h2>\n

Each member of a married couple can make annual, tax-free gifts to any number of people each year. Gift amounts are limited up to a federally determined gift exclusion limit without incurring a\u00a0gift tax<\/a>.<\/p>\n

The 2025 limit is $19,000 per recipient. If both spouses engage in gifting, they could collectively give away their combined exemption amount each year. In 2025, a married couple could gift a combined $38,000 to another person without incurring a gift tax.<\/p>\n

Over a period of years, the amount that can be transferred to a couple’s intended beneficiaries in this way could be substantial. It can lower the taxable estate’s value, reducing federal and state estate taxes.<\/p>\n

3. Gifting to Minors<\/h2>\n

There are ways to\u00a0gift to minors<\/a>\u00a0without incurring gift tax consequences. You may make gifts according to the Uniform Transfers to Minors Act using custodial accounts that are controlled by state law.<\/p>\n

When states adopt a model law, such as UTMA, they often make minor changes to the statute. The Gifts to Minors rules apply until recipients turn 18 or 21, depending on where they live.<\/p>\n

UTMA allows a minor child to receive money or real property. The nature of the property that can be gifted or transferred to minors under the law is expansive. Specifically, these gifts could include:<\/p>\n