Estate tax is currently 40% on the amount remaining in your estate upon death that exceeds the $12.48MM lifetime statutory exemption.
Estate planning attorneys/accountants help transfer/gift the lifetime statutory exemption amount (currently $12.48MM) prior to your death so it can grow for the benefit of your heirs without being subject to the 40% estate tax.
Gifting often includes techniques for discounting the value of the assets being transferred out of your estate. E.g., a gift of a minority shares in a privately held company is often gifted at a 30% discount, enabling you to effectively gift more than your lifetime statutory exemption.
If you gift too much to your child’s trust, they will be faced with the same lifetime statutory exemption problem. Consider a generation skipping trust.
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