Receiving an inheritance may be exciting for some, but stressful for others. There are many questions that arise when individuals get word that they are about to inherit from a loved one. The most common question is: will I have to pay an inheritance tax? Luckily, if you live in California, there is no California inheritance tax, but that is not true in every state. Here is what you need to know: What is inheritance tax? An inheritance tax, as the name implies, is a tax imposed by the … [Read more...]
7 Basic Steps of the Probate Process
When a loved one dies, the money and property included in their estate need to be distributed to their heirs. In many cases, the estate must go through the probate process in order for the assets to be properly distributed. The basic probate process requires completion of several steps in order to close probate and make those distributions. This article will explain the 7 basic steps required in the California probate process. Before the probate process can formally begin, you need a personal … [Read more...]
Is There a California Estate Tax?
Is There a California Estate Tax? from Timothy Murphy We pay taxes on different levels all throughout our lives. You would probably like to think that your death is not going to be a taxable event. Unfortunately, the tax man has other ideas. … [Read more...]
Estate Administration: A Probate Attorney Can be Invaluable
A probate attorney, commonly referred to as an estate attorney, focuses on assisting a Personal Representative through the entire probate process from beginning to end. A probate attorney can be an invaluable resource because the laws in each state are different with regard to probate proceedings and all of the requirements imposed by the probate court. In fact, the first piece of advice for a personal representative is “hire an attorney.” Here's why. What is involved in estate … [Read more...]
Answers to Five Inheritance Tax Questions
You just found out that you will inherit from a loved one's estate. While this might be exciting news, it may also cause some concern. Most people know that estate taxes are typically imposed. Whether or not an heir has to pay any inheritance tax depends entirely on your state. Since state laws are constantly changing, it would be wise to consult with your estate planning attorney if you are receiving an inheritance. Here are the answers to five common inheritance tax questions. No. 1 – … [Read more...]
Trusts Can Satisfy Many Different Objectives
The importance of trusts in estate planning is seen in their ability to minimize estate taxes and hopefully avoid probate. A trust is basically a fiduciary agreement, one based on trust and confidence, between the person making the trust (grantor) and the trustee. This agreement gives the trustee the authority to manage the assets of the trust and distribute those assets to the beneficiaries as specified in the trust agreement. There are several different types of trusts with their own … [Read more...]
The History of the Federal Estate Tax
There are many people who have ideological difficulties with the fairness of the federal estate tax. Where does this idea come from? Throughout your life, you pay taxes on your income, and this includes investment income, even though you make investments with assets that you have left over after paying income taxes. Of course, there are also property taxes, sales tax on your purchases, and somewhat hidden taxes on things like energy, communication, hospitality, gasoline, alcohol, tobacco, … [Read more...]
Is There a Federal Inheritance Tax in the United States?
There are terms that are used in the field of estate planning that can sound interchangeable, and this can lead people to misguided beliefs. This dynamic enters the equation when it comes to death taxes. You may assume that an inheritance tax and an estate tax are identical. The idea is that these are just two different terms that can be used to describe the same thing. If you are not an estate planning professional, this assumption may make sense, because they do sound quite similar. In … [Read more...]
Isn’t a Trust Just a Glorified Will?
People sometimes assume that a trust is a somewhat glorified legal device that accomplishes the same thing that a will would accomplish. In fact, there are different types of trusts. Trusts can satisfy objectives that a will would not satisfy. Let's look at some of these scenarios. Estate Tax Exposure The federal estate tax is a legacy threat to high net worth families. This tax carries a 40 percent top rate, so we are talking about a very significant level of taxation. The good news is … [Read more...]
Estate Tax Strategy for Appreciable Assets
There are things that you can do to potentially transfer assets at a tax discount if your estate is going to be exposed to the federal estate tax. This tax is applicable on transfers that exceed the amount of the federal estate tax exclusion. For the rest of this year, the exclusion is $5.43 million, but it is going up to $5.45 million next year after an inflation adjustment is applied. If you are married, you can use the unlimited marital deduction to transfer unlimited assets to your spouse … [Read more...]
