Wealthy couples often face an estate tax: Here’s their favorite legal maneuver to get around it

High net couples do not have any lack of tools and strategies available to them to reduce their tax obligations and their wealth. But the financial planners say that a particularly favorable arrangement has become a specialized matter in recent years-which helps them transfer wealth between generations while benefiting from it during their lives. They are called marital age funds, or slides.

Slices are irreversible boxes that allow couples to maintain access to their assets while keeping them outside their taxable properties. They are used by an increasing number of wealthy clients to take advantage of the exemptions from real estate and gift tax, a strategy that can lead to major tax savings over the age.

Here is the way in which he works: One of the wives, called the donor, transports her individually owned assets from her property to a segment in favor of her husband, who is called the beneficiary. Once it is removed from the ownership of the donor, the future estimate of the assets is removed, which means that these gains will not be imposed on them.

But the spouses are inseparable from the money: the beneficiary husband can access the assets in the slide for health, education, maintenance and support for both his wife. “Some may say that you suffer from your cake and eat it too.”

Peterson says the basic purpose of the slide is to transfer the growth of future assets abroad. It gives an example of transferring $ 5 million to the slide. If it is ultimately growing to $ 15 million, the estimate of $ 10 million is not subject to real estate taxes upon the death of the donor. The creation of Slat can also be a good way to protect assets from creditors or claims against any of the spouses.

“We must remember that the slides are the real estate tax strategy, and not necessarily the income tax strategy,” says Peterson. “Slices are usually organized as donor boxes, so the donor continues to pay income taxes on confidence profits.”

This is a particularly useful arrangement for some couples because many boxes that are not re -canceled do not allow beneficiaries to take distributions even after the death of the grant. However, with a slice, beneficiaries can withdraw income or manager to maintain the standard of living for the couple.

Peterson says these benefits may seem very good that they cannot be correct, but there are also defects. The main one is that any irreversible gift – the donor abandons all rights of money. “It can become a problem in the event of divorce or the husbands who pass,” says Peterson. In addition, the jointly owned assets cannot be transferred to the slide.

The donors should be sure, then, they can continue to live their lifestyle if they lose access to that money in the future, for any reason. If the husband who benefits in front of the donor dies, the remaining assets will be transferred to the beneficiaries of this husband, usually children, without real estate taxes.

Slides are increasingly popular

Slices have been especially popular recently thanks to the imminent sunset of the 2017 tax cuts law, or TCJA. This law doubled the exemption of real estate tax, or the maximum that individuals and husbands can give them the beneficiaries during their lives and as part of their property without paying a gift or federal real estate tax.

The transfer of assets from the property of one of the spouses to Slata was reported to approve the gift tax, which means that it is applied to exemption from donor gifts and exemption on real estate. This is currently $ 13.99 million for individuals – and a double for married couples – but it can decrease in half in January, depending on what congress can cross as part of the ongoing tax bill negotiations. This has created something of the racing mindset around the clock for some high -value families, as financial advisors say, if Congress fails to restore double exemption.

“By offering a gift now, you can use a full $ 13.99 million, for waiting until 2026 and has the ability to offer a gift of about $ 7 million without the consequences of gift tax,” says Peterson.

But again, couples will want to be careful. Exemption can be easily extended, after which they may set limits on how to reach their money without reason.

This story was originally shown on Fortune.com

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2025-06-12 17:27:00