Estate taxes can significantly cut into the wealth you’ve accumulated over a lifetime and impact the legacy you wish to leave behind. Your reliable Central Pennsylvania retirement planners, 1st Choice Financial Services, Inc., in Camp Hill, provide full-service financial services to clients in Harrisburg, Hershey, Halifax, Lancaster, Lebanon, Enola, and surrounding communities. We understand how vital it is for you to safeguard your legacy, and we’re committed to assisting you through professional estate tax planning strategies.

Understanding Estate Tax

Estate tax depends on the value of your estate after you pass away, including things such as real estate, investments, personal property, and business interests. The IRS adds up the total value of these assets before determining the taxable amount, which can affect what your heirs receive. As of 2025, the federal estate tax exemption is $13.61 million per individual, so estates over this amount may be subject to taxation. State estate taxes vary, and inheritance taxes in some states could further reduce what your beneficiaries could inherit. Changes in legislation may alter exemption limits, so you must keep up to date and amend your estate plan accordingly. High-net-worth individuals, particularly those in Central PA, should utilize estate tax planning to safeguard their assets.

Estate Tax Reduction Strategies

Some methods minimize estate taxes to a bare minimum while having your estate divided as per your wishes. Estate taxes, if not planned for, will consume some of what you intend to leave. As such, it is worth looking at every avenue to curtail the liabilities.

Gifting

Utilizing the annual gift tax exclusion allows you to give as much as $19,000 per recipient in 2025 without incurring gift taxes. By gifting assets during your lifetime, you can reduce the taxable value of your estate. For example, you might give appreciated assets to family members, which could save them from paying capital gains taxes down the road and reduce the size of your taxable estate. Utilizing the lifetime gift tax exemption also enables the transfer of large amounts of wealth, which lowers estate taxes even more.

Charitable Giving

Making charitable gifts as a part of your estate plan will reduce your taxable estate. Bequests, charitable trusts, or donor-advised funds not only support causes that you are committed to but also provide tax advantages. You may be able to lower the size of your estate and perhaps the estate tax by donating to qualified charities. Charitable remainder trusts allow you to provide an income stream during your lifetime and still allow the remainder to go to charity. This offers financial as well as tax advantages.

Trusts

Establishing trusts can be an effective way of managing your assets and having greater control over how they are transferred to heirs. A properly drafted trust can help ensure that beneficiaries inherit in accordance with your wishes and long-term financial goals. Irrevocable trusts, for instance, transfer assets beyond your estate, which can reduce estate taxes. Specific types, like irrevocable life insurance trusts or grantor retained annuity trusts, yield particular benefits, like providing liquidity to pay for estate taxes or allowing you to receive annuity payments for a set number of years.

Proper Asset Allocation and Investment Strategies

It’s important to match your investment strategy with your estate planning. Asset allocation and diversification techniques can impact how your investments grow and how much of your wealth is subject to estate tax. By working with a retirement planning professional, you can allocate your assets for growth and tax efficiency. Strategic planning may involve transferring assets to tax-preferred accounts or investing in real estate and other investments that have estate tax benefits. This might entail investing in assets with a step-up in basis or utilizing tax-preferred accounts to reduce potential estate taxes.

Why You Can Benefit from Professional Advice

It requires customized planning and technical expertise to master estate tax laws. These laws frequently change, and exemptions or tax rates may shift based on legislative updates. Being proactive and addressing alterations with a qualified expert will enable you to update your strategy to keep it tax-efficient throughout the years. 

With our methods and advice, you may be able to shield your estate from over-taxation and keep more of your wealth intact so that it’s distributed according to your wishes. Ongoing estate tax planning is a critical component of protecting your financial heritage for future generations. The sooner you develop a comprehensive plan, the more options you’ll have for reducing tax payments and leaving greater wealth to your family.

At 1st Choice Financial Services, Inc., we specialize in developing complete strategies based on your individual circumstances. We’re dedicated to helping you safeguard your legacy and reach your financial objectives. We encourage you to contact us to schedule an appointment to meet with one of our representatives to discuss how we can serve you with expert estate tax planning.

Investment advisory services offered through Foundations Investment Advisors, LLC, an SEC registered investment adviser.

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