IRA Beneficiary
30. Creating Separate Estates Saves Taxes
All they had to do was split their $4 million estate into two smaller estates of $2 million each.
When Bob dies, his estate (as shown on the right) uses his $2 million exemption. And when Sue dies later, her estate (as shown on the left) uses her $2 million exemption. The result is that both their taxable estates are reduced to $0, so the full $4 million can go to their loved ones. Tax savings? $1,384,615! Plus, by using trusts as shown here, they save thousands more in probate costs!
Now,let me explain a little more about how this arrangement works.