How can I designate my children as heirs in a tax-optimized way?
October 24, 2022 | 45,00 EUR | answered by Otto Dornbusch
Dear tax advisor,
my name is Leonie Sauer and I am currently intensively dealing with the topic of inheritance tax. I am faced with the challenge of tax-efficiently appointing my children as heirs and I am unsure of the best way to proceed.
Regarding the current situation: I have two children whom I would like to appoint as my main heirs. My assets mainly consist of real estate and securities. I am concerned about how high the inheritance tax will be for my children and would like to know if there are ways to minimize it.
The current situation is as follows: My assets are expected to exceed the tax-free allowance for inheritance tax, so my children will have to pay taxes. Since I would like to pass on as much as possible to my descendants, I am interested in tax-efficient solutions to reduce the tax burden for my children.
My concerns are that my children could lose a large part of my assets due to high inheritance taxes, and I would like to secure them as best as possible. Therefore, I wonder what strategies and measures I can take to appoint my children as heirs in a tax-efficient manner and minimize the inheritance tax burden.
Can you provide me with possible solutions and tips on how I can appoint my children as heirs in a tax-efficient manner? I look forward to your expertise and thank you in advance for your support.
Sincerely,
Leonie Sauer
Dear Mrs. Sauer,
Thank you for your inquiry regarding inheritance tax and your concern for tax-optimized succession planning for your children. It is understandable that as a parent, you want the best for your children and want to ensure that they pay as little inheritance tax as possible in order to preserve your wealth.
In your case, where your wealth consists mainly of real estate and securities, there are various ways to minimize the inheritance tax burden for your children. An important strategy could be an anticipated inheritance. This means transferring assets to your children during your lifetime in order to take advantage of the tax-free allowance and reduce the tax burden. These gifts can be made for both real estate and securities.
Gifts also have tax-free allowances, which can be used every 10 years. By making early gifts, taking into account the allowances and possible tax planning options, you can significantly reduce the tax burden for your children. Additionally, through a gift, you can take advantage of certain tax benefits, such as the deduction for owner-occupied property.
Another option is to establish a family foundation. Through a foundation, you can transfer assets to a legally independent entity that then has your children as beneficiaries. Through the foundation, you can secure your wealth for generations to come and also take advantage of tax benefits, as foundations can be exempt from inheritance tax.
It is advisable to seek advice from an experienced tax advisor or estate lawyer to find the best solution for your individual situation. Each case is unique and requires tailored advice.
I hope this information helps you and provides you with a first orientation. I am available for further questions and to support you in tax-optimized planning for your children.
Sincerely,
Otto Dornbusch
