I’m 80 with $1 million. How do I prevent my son from being hit with taxes?

MarketWatch

by Quentin Fottrell

February 21, 2026

AI-Generated Deep Dive Summary

An 80-year-old woman with $1 million in assets, including $650,000 in investments, $250,000 in life insurance, and $150,000 in home equity, is seeking advice to protect her son from inheritance taxes. She wants to ensure that her son inherits her estate without facing significant tax burdens. The article highlights the complexities of transferring wealth and the importance of proper financial planning to minimize tax obligations. The woman’s assets include long-term-care insurance, which may also play a role in protecting her son’s inheritance. Life insurance death benefits are generally income-tax-free for beneficiaries, but other assets like investments and home equity may be subject to estate taxes depending on their value and local laws. Understanding the specific rules around each type of asset is crucial for minimizing tax exposure. Inheritance tax rules vary by state, and some states do not impose them at all. For federal taxes, the exemption amount for 2024 is $12.56 million, meaning only estates exceeding this threshold are subject to federal estate taxes. However, many states have lower exemptions, so it’s essential to evaluate how each asset will be treated in her specific location. To protect her son from taxes, the woman could consider strategies such as gifting assets during her lifetime or creating irrevocable trusts that remove assets from her taxable estate. Consulting with a financial advisor or estate planning attorney is recommended to explore these options and implement a plan tailored to her situation. Proper planning can help ensure that her son receives the inheritance with minimal tax impact, preserving more of her wealth for his benefit. This issue is particularly relevant for readers interested in finance and estate planning, as it highlights the importance of proactive strategies to protect loved ones from financial burdens. By understanding tax implications and leveraging available tools, individuals can better secure their family’s future and avoid unnecessary costs associated with inheritance taxes.

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Originally published on MarketWatch on 2/21/2026