I am about to receive a large sum of money in excess of 2 million dollars. I am married and have 2 small children. What trust accounts are best to protect my money from creditors and reduce my overall taxes. What options are available to ensure I am able to protect my money since the FDIC only ensures up to $250k?
1 Answer from Attorneys
Unfortunately advanced tax / trust planning is too fact specific to adequately address in an online post. Generally estates over $1M will benefit from tax planning.
That being said, marital trusts can reduce the taxability of one's estate by putting some money into a trust when the first spouse passes. These types of trusts are often called A-B trusts or marital trusts. If a planner intends to eventually give money to charity, certain annuity or interest trusts can also reduce one's taxable estate. Gifts to children or others can also be staggered over many years by giving the maximum each year without triggering gift tax. Other vehicles exist to invest in children's education can reduce one's estate and have positive tax treatment now.
The advice of both a financial planner and estate / life planning attorney would likely assist you in making specific decisions. While I hope that the above helps it is not a substitute for personalized legal advice.
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