The primary method of reducing your estate taxes is to reduce the size of your estate. There are many ways to accomplish that goal.

Annual Gifting Program.

One way to reduce the size of your estate is to make use of the annual gift tax exclusion by making gifts of $14,000 per year (in 2014 and 2015) to as many beneficiaries as you think is appropriate. A married couple can give up to $28,000 per donee per year. If you are married and have two children, who are married and who have two kids each, an annual gifting program can reduce your estate by over $1,000,000 over 5 years. (Of course, you also need to have sufficient liquid assets.)

Charitable Gifts.

Lifetime gifts to charity can result in both income tax saving and estate tax savings. Charitable gifts on death can reduce estate taxes. A charity does not pay income taxes on gifts, and you can maximize the efficiency of your giving by designating a charity as the beneficiary of an IRA account, or a highly appreciated asset.

Charitable Trusts.

A split interest trust with a charity can reduce your estate taxes, while providing a gift to the charity and retaining a significant benefit for you or your heirs.

Irrevocable Life Insurance Trust.

An “ILIT” can be used to remove the proceeds of an insurance policy from your taxable estate. The insurance proceeds can provide liquidity to your estate, so that your assets don’t need to be sold at a reduced value to pay your taxes.