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Estate tax, sometimes referred to as inheritance tax, is a tax that is imposed on the transfer of property upon the death of an individual. It is important for individuals with significant assets to plan ahead in order to minimize the impact of estate tax on their heirs. While estate taxes can take a significant chunk of an estate, there are legal ways to minimize or even completely avoid paying estate taxes. Here are some strategies to help you legally avoid estate tax:

1. Gift Tax Exclusion: One of the most commonly used strategies to avoid estate tax is to make gifts to your heirs during your lifetime. The IRS allows individuals to gift up to a certain amount per year to each recipient without incurring gift tax. As of 2021, the annual gift tax exclusion is $15,000 per recipient. By gifting assets to your heirs during your lifetime, you can reduce the size of your taxable estate.

2. Use a Trust: Setting up a trust can be an effective way to avoid estate tax. By transferring assets into a trust, you can ensure that those assets are not subject to estate tax upon your death. There are several types of trusts that can be used to minimize estate tax liability, such as revocable trusts, irrevocable trusts, and charitable trusts.

3. Take Advantage of the Marital Deduction: The marital deduction allows for unlimited transfers of assets between spouses without incurring estate tax. By leaving assets to your spouse upon your death, you can take advantage of the marital deduction and potentially avoid estate tax altogether. However, it is important to note that the marital deduction may not be available if your spouse is not a U.S. citizen.

4. Make Charitable Contributions: Another way to reduce estate tax liability is to make charitable contributions. By leaving assets to a qualified charity in your will, you can lower the value of your taxable estate. Charitable contributions are deductible from the value of your estate, reducing the amount of estate tax that must be paid.

5. Plan Early: It is important to start planning for estate tax early in order to maximize the effectiveness of your estate tax avoidance strategies. By starting early and working with a qualified estate planning attorney, you can ensure that your assets are structured in a way that minimizes estate tax liability for your heirs.

In conclusion, there are legal ways to avoid estate tax, but it requires careful planning and consideration of your individual circumstances. By utilizing strategies such as the gift tax exclusion, trusts, the marital deduction, charitable contributions, and early planning, you can minimize or even eliminate the impact of estate tax on your estate. It is recommended to consult with a qualified estate planning attorney to develop a comprehensive estate plan that meets your goals and objectives while minimizing estate tax liability for your heirs.