Estate Taxes

When considering estate planning, you need to be aware of the taxes that could be incurred if your assets are not properly distributed. Establishing a will and/or trust will ensure your money ends up where you desire. The amount of taxes paid to the government on accumulated wealth is enormously high. instead of “donating” money to government through taxes, make sure your money benefits those you love and care about after your death.

Estate Tax

The IRS defines estate tax in this way: “The Estate Tax is a tax on your right to transfer property at your death. It consists of an accounting of everything you own or have certain interests in at the date of death.” This isn’t a concern for most because the current tax laws allow assets up to $5 million to be passed on to a surviving spouse or heirs. However, if your estate is valued beyond $5 million, then the federal estate tax rate is 35%.

To calculate the value of your estate, keep in mind the IRS permits certain deductions from your Gross Estate to determine the Taxable Estate amount. “These deductions may include mortgages and other debts, estate administration expenses, property that passes to surviving spouses and qualified charities. The value of some operating business interests or farms may be reduced for estates that qualify.”

FIND SCHOOLS
Sponsored Content

Some states do have a state death tax. It is highly advisable to consult a good estate planning attorney to verify the tax consequences applicable in your state. You don’t want to be caught unaware. In a few states the estate tax exemption amount is lower than the federal government’s. For instance, Maine, Maryland, Massachusetts, Minnesota, New York, Oregon and Tennessee where the state estate tax exemption is only $1 million, leaving a gap of $4 million in 2011 and $4.12 million in 2012.

 

 

Wiley University Services maintains this website. We are an advertising-supported publisher and are compensated in exchange for placement of sponsored education offerings or by you clicking on certain links posted on our site. This compensation may impact how, where and in what order products appear within listing categories. We aim to keep this site current and to correct errors brought to our attention. Education does not guarantee outcomes including but not limited to employment or future earnings potential. View Advertiser Disclosure
Wiley University Services


©2024 https://www.financialplannerworld.com All Rights Reserved.