How can I save taxes when inheriting wealth?
November 15, 2022 | 50,00 EUR | answered by Wilhelm Ackermann
Dear Tax Advisor,
My name is Lilli Heuser and I am facing the challenge of passing on my wealth to my heirs. I am concerned about the inheritance tax that my heirs may have to pay. I would like to know how I can save taxes and what options are available to minimize the tax burden for my heirs.
Regarding the current situation: I own a home, a small stock portfolio, and a savings account. My total wealth amounts to approximately 500,000 euros. I have two children who are my only heirs. My main concern is to ensure that my children have to pay as little tax as possible when they inherit my wealth.
I am worried that my heirs could lose a large part of my wealth due to inheritance tax. Therefore, I would like to learn from you what tax optimization options are available and how I can best protect my heirs.
Can you provide me with specific tips on how to save taxes when transferring my wealth? Are there legal tax avoidance strategies that I can use? What gifting options are available to me to reduce the tax burden? I look forward to receiving well-founded information and specific recommendations from you to best protect my heirs.
Thank you in advance for your support and expertise.
Sincerely,
Lilli Heuser
Dear Mrs. Heuser,
Thank you for your inquiry regarding inheritance tax and your concern about the tax burden that your heirs may have to bear. It is understandable that you are eager to protect your children as much as possible and save on taxes. I am happy to provide you with some specific tips and recommendations to help protect your heirs from a high tax burden.
First and foremost, it is important to know that in Germany, inheritance tax is calculated based on the relationship of the heir to the deceased and the value of the inheritance. As direct descendants (your children), your heirs have a tax-free allowance of 400,000 euros per child. This means that no inheritance tax is due up to this amount. For a total estate of 500,000 euros, your children would only have to pay inheritance tax on the amount exceeding 100,000 euros.
To minimize the tax burden for your children, there are various options available. One option would be to gift assets during your lifetime. You can make use of annual tax-free allowances of 20,000 euros per child, for example. By making regular gifts, you can transfer a portion of your assets tax-free and reduce the tax burden.
Furthermore, by utilizing specific gifting and estate planning strategies, you can optimize the tax burden. It is important that these gifts are made in a timely manner, taking into account tax-free allowances and regulations. Strategic estate planning can also help minimize the tax burden.
However, it is important to note that tax avoidance strategies should always comply with legal requirements. It is advisable to seek advice from an experienced tax advisor to ensure that all measures are implemented in a legal and tax-efficient manner.
In conclusion, I would like to emphasize that individual circumstances and personal financial situations play a role in tax planning. Therefore, I recommend scheduling an appointment for my online consultation to discuss your specific situation and receive tailored recommendations.
I hope this information is helpful to you and I am happy to answer any further questions you may have.
Best regards,
Wilhelm Ackermann
