Estate Freeze Techniques refer to a set of financial strategies used to minimize future estate taxes and preserve wealth for heirs by "freezing" the value of an individual’s estate at its current level.
These techniques typically involve transferring assets that are expected to appreciate in value to heirs or trusts, while retaining income rights or control over the assets. This way, any future appreciation of the assets occurs outside of the original owner’s estate, thereby reducing the estate tax liability upon death.
Common estate freeze methods include gifting shares of a business to family members, creating family limited partnerships, or utilizing irrevocable trusts. For instance, if a business owner transfers ownership of their business to a trust for their children while retaining a fixed income from that business, the future appreciation in value of the business will not be included in the owner’s estate for tax purposes.
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