How to give your kids money without losing half of it to taxes
If you want to leave your children a generous amount of money in your will, the federal estate tax may eat up a large chunk of their inheritance.
That tax only kicks in if your money and property - your "estate" - exceeds a certain amount, which the IRS adjusts each year based on inflation. For 2015, it's $5.43 million per person, meaning any estates worth more than that will be taxed, up to a whopping 40%.
However, you can whittle down your estate by gifting some of that money tax-free while you're alive. Even if you aren't trying to minimize the effect of an estate tax, it's nice to be around to see your kids enjoy whatever you've gifted them.
If you choose to start giving them money before your will kicks in, there are a few important things to know in order to maximize the amount you pass along:
This article was written by Business Insider without the involvement of Merrill Lynch.
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