How can I protect my heirs from high tax burdens?
February 24, 2022 | 50,00 EUR | answered by Wilhelm Ackermann
Dear Tax Advisor,
My name is Phillip Klett and I am faced with the question of how I can protect my heirs from high tax burdens. Currently, I am planning my estate distribution and want to ensure that my heirs are not burdened by high inheritance taxes.
My current situation is as follows: I have a substantial amount of assets, including real estate, securities, and other assets, that I would like to pass on to my children. However, I am concerned that they could lose a large portion of the inherited assets due to inheritance tax.
My main concerns are that my heirs may have to make high tax payments after my death and could potentially face financial difficulties. Therefore, I would like to know what options are available to protect my heirs from a high tax burden.
My question to you as an experienced tax advisor is: What strategies and measures do you recommend to me to effectively protect my heirs from high tax burdens? Are there any tax planning options that I should consider to minimize the tax burden on my heirs?
I look forward to your expert advice and thank you in advance for your support.
Sincerely,
Phillip Klett
Dear Mr. Klett,
Thank you for your inquiry regarding inheritance tax and possible strategies to protect your heirs from high tax burdens. As an experienced tax advisor, I can provide you with some important tips and recommendations to achieve this.
First of all, it is important to know that in Germany, inheritance and gift tax are levied on the acquisition of assets. There are tax-free allowances up to which no taxes apply. These allowances depend on the relationship between the deceased and the heirs. For example, the tax-free allowance for children is currently 400,000 euros.
To protect your heirs from high tax burdens, you can take various measures. One option is timely planning and structuring of your estate. By cleverly dividing and transferring assets, you can reduce the tax burden. For example, you can gift assets during your lifetime to fully utilize the tax-free allowances.
Furthermore, you can use testamentary or inheritance contract to take advantage of tax planning opportunities. For example, you can establish legacies or usufruct rights to minimize the tax burden. Setting up foundations or using tax-optimized asset structures may also be useful in reducing inheritance tax.
However, it is important to consider other aspects such as the individual needs of your heirs and long-term asset protection when planning your estate. Individual advice from an experienced tax advisor is essential to find a tailored solution for your situation.
I recommend scheduling a personal consultation to discuss your specific needs and goals together. I am happy to assist you with my expertise and experience to protect your heirs from high tax burdens as effectively as possible.
I look forward to helping you and thank you for your trust.
Best regards,
Wilhelm Ackermann
Tax Advisor
