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Estate Taxes

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Call us at 888-213-4695 or visit your local branch.

Did you know that estate taxes, along with income and transfer taxes, could diminish your estate by as much as half? Here are four things you can do now to preserve more of your assets for your heirs.

As of 2018, you can give up to $15,000 per recipient ($30,000 for spouses who "split" gifts) to any number of individuals, without incurring a gift tax. Anything over the annual limit applies toward a lifetime exemption amount.

What you can do now:

  • With a custodial account, you can make gifts to a minor child (tax-free up to the $15,000/$30,000 limits as above) and manage the account on his or her behalf.
  • Withdrawals can be made at any time as long as they are for the benefit of the child.
  • The account must be transferred to the minor when he or she reaches a certain age (from 18 to 25, depending on the state).

What you can do now:

  • With a 529 account, you can give five times more than the annual tax-exempt limit ($15,000 x 5 = $75,000) in a single year, without incurring gift tax, as long as you treat the gift as if it were made in equal payments over five years on your tax return.
  • Any gift during the five-year period will be subject to gift tax; however, you can also pay education providers (or medical providers) directly on behalf of another without limit (the annual gift-tax exclusion does not apply in this case).

What you can do now:

  • Giving to charity can provide a current-year income tax deduction while removing assets from your taxable estate.
  • If you're considering a significant charitable commitment, you may also want to look into strategies such as donor-advised funds, private foundations, or charitable trusts.

What you can do now:

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Call 888-213-4695.

Already a Schwab client?

Call our Trust and Estate Specialists at 888-213-4695.

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