Inheritance tax, often confused with estate tax, is a tax imposed by certain states in the U.S. on individuals who inherit assets from a deceased person's estate. Unlike the estate tax, which is levied on the entire value of an estate before distribution, inheritance tax is paid by the beneficiaries. The rate of inheritance tax, where applicable, often depends on the relationship between the deceased and the beneficiary, as well as the value of the inherited property. Here are some strategies … [Read more...] about Understanding Inheritance Taxes and How to Minimize Their Impact
If you recently learned that you are the beneficiary of real property as part of an inheritance you received, you may have questions about your rights and responsibilities related to the inheritance. Specifically, you may be wondering if you are required to pay an inheritance tax on the property. We'll explain when inheritance taxes might be owed on the property you inherited. Federal Gift and Estate Taxes The federal gift and estate tax is a tax that is imposed by the federal government … [Read more...] about If I Just Inherited Property, Do I Need to Pay an Inheritance Tax?
What are the tax implications of an inheriting an IRA? The answer depends on several factors: Is it a traditional IRA or a Roth IRA? The funds in a traditional IRA have never been taxed and will be taxed as they are withdrawn. Roth IRAs contain post-tax dollars and are not again taxed upon their withdrawal. Is the beneficiary of the IRA a spouse, a non-spouse person, or a charity? When the beneficiary of an IRA is the spouse of the IRA owner, the spouse will have a number of … [Read more...] about Ins and Outs of Inheriting an IRA
At our law firm, we dedicate most of our time to helping our clients plan their estates, address issues involving incapacity and long term care planning, and helping to administer their estates and trusts after their gone. However, we also regularly get questions from our clients when they are the beneficiaries or heirs of someone else’s estate. When receiving an inheritance, few people consider that there may be a big decision looming. You are still mourning the passing of someone dear to … [Read more...] about When “No” is the Best Answer
When someone passes on, his or her assets are typically left behind to a beneficiary. If you find yourself the recipient of money, you may have a big question on your mind: will I have to pay taxes? Before we go any further, remember this: it is a good idea to speak with a qualified estate planning attorney to ensure that you are paying all necessary taxes. Whether or not you are required to pay inheritance tax depends on how much money you are receiving, the state in which you live, and … [Read more...] about Taxes and Inheritances: Planning and Coping
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...] about Is there a California Inheritance Tax?
Getting the news that you have inherited money or property from a family member is usually a good thing. For some people, it may be more of a concern. If you receive income-based government benefits, you may be concerned that your benefits will be in jeopardy if you receive a significant inheritance. For instance, if you receive Medi-Cal or Supplemental Security Income (SSI), you assets must not exceed a certain amount in order for you to remain eligible. If that's the case, you need to … [Read more...] about Protecting Your Inheritance with Inheritance Planning
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...] about Answers to Five Inheritance Tax Questions
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...] about Is There a Federal Inheritance Tax in the United States?
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...] about Estate Tax Strategy for Appreciable Assets