Reducing an Estate's Tax Burden Lets Heirs Receive More Over the Long Term

We recently advised a man who was administrator of his late wife's estate for the benefit of the children.  By making distributions of income rather than principal to the children, the estate's tax burden was reduced.  The children's tax liability was significantly lower than the 33% the estate would have paid.  Then the estate delivered additional checks giving the children the amount they had paid in taxes.  This strategy preserved a larger proportion of the estate for future disbursements to the children, so that they will receive the maximum amount over time.