Don’t Get Overwhelmed by the ‘Taxing’ Elements of Estate Planning


“‘Tis impossible to be sure of any thing but Death and Taxes.” – C. Bullock (1716)

One of the most common reasons people require assistance when making an estate plan is to deal strategically with the tax consequences of their various options. The Internal Revenue Code is incredibly complex, and most people want to take advantage of any breaks that may be available. They also want to avoid costly penalties that come from not properly planning ahead.

There is no reason for people to have to figure everything out on their own, and it is a mistake to assume there is nothing you can do to minimize tax obligations with an estate plan. Instead, discuss with an attorney how to create an estate plan that accomplishes the following tax-related goals.

  1. Finding solutions that align with your beliefs – Various planning solutions can help minimize tax obligations, but they may not all align with your personal beliefs and priorities. For instance, if you want to donate to charity, there are numerous ways to do this while also minimizing tax implications, including the establishment of charitable lead trusts.
  2. Reducing your loved ones’ financial burdens – If you plan to gift money to your children, grandchildren, or others, then you likely want to ensure they receive as much of that gift as possible. With careful planning, you can give a gift or leave an inheritance in such a way that your generosity doesn’t cause a tax burden for your loved ones.
  3. Leaving behind a legacy of tax obligations – Unpaid tax debts, outdated plans, and failure to set aside money for estate taxes (if you live in Minnesota or the five other states that collect local estate taxes) can leave your loved ones with the task of working out how to pay the taxes instead of focusing on the job of working through their grief.

Tax-related issues are undoubtedly complicated, and they don’t get easier in the context of estate planning. As such, it can be vital that you discuss this complex element of your individual plan with an experienced attorney.