12Law Arrow 12Law Arrow  Easy Questions  
12Law Arrow 12Law Arrow Instant Legal Documents
 
 
FINANCIAL & MARITAL

Cohabitation Agreement coming soon!
Separation Agreement coming soon!
No-Fault Divorce coming soon!
Bankruptcy coming soon!
 
 

A Primer on Estate & Inheritance Taxes in Zip Code 90405

A Primer on Estate & Inheritance Taxes in Zip Code 90405


Me and my dad are the biggest promoters of an estate tax in the US. It's not a popular position.
 
- Bill Gates


When you die, you leave your home, your possessions, your money, and other things of monetary value to spouses, children, family members, friends, charity or religious institutions. The government wants its share. Some argue that estate taxes can provide for future generations. Others argue that is robs inter-generational businesses of the capital they need to keep growing.

Your estate may be subject to inheritance tax, estate tax, state and federal tax statutes, and a host of exemptions that can pass more of the estate to inheritors of your choosing.

What are the differences between Estate Taxes and Inheritance Taxes?

Let's start with estate tax. Your estate is the total of your possessions and debts left behind when you die. An executor, either named in the will or appointed by law, will pay off outstanding debts, cover funeral expenses, and administrative costs (e.g. executor's fees). If necessary, executors may liquidate property to pay taxes, debts, or fees. After federal and state estate taxes are paid, the remainder goes to the heirs. So, the estate tax is a tax on the total amount of the estate, after creditors are paid but before any heirs get their bequest. The tax is paid by the estate itself.

Inheritance tax occurs after the heirs receive their payouts. It is a tax on the amount received and is paid by the heir. Inheritance taxes are levied by the states. This means that in many cases an estate is taxed twice -- first by the federal estate tax, then by the state inheritance tax.

The estate includes cash on hand, bank accounts, financial assets (stocks, bond, mutual funds, etc.), real estate, automobiles, boats, art pieces or rare collections, personal property, debts owed to the estate, business interests, etc. An estate is made up of all of these things. An appraiser will determine the fair market value of everything to determine the taxable value of the estate.

Inheritance Tax Exemptions

For large estates, sophisticated estate planners will work with the family and utilize trusts, charitable donations, non-taxable gifts and other techniques to meet the family's needs and minimize the tax burden.

For small estates, there are exemptions are applied to the taxable amount before estate taxes are collected. Exemptions can be relation based and amount-based.


There is an exemption when the estate is passed from a deceased person to their US citizen spouse. It will not be subject to any federal estate tax. States that levy an estate tax generally follow the federal government's rules for this, as well. If the estate is passed to children, siblings or golfing buddies, the exemption doesn't apply.

Amount-based exemptions are $5.34 million for an individual, $10.68 million for a couple as of 2014. It is indexed for inflation, so it will probably grow over time.

State inheritance taxes vary a great deal and can make things much more complicated. There might be exemptions for some family members, or different tax rates depending on whether you are a spouse, a child or just a friend. Many states tie their inheritance tax directly to the federal estate tax and exemption rate. Some have much lower thresholds than the federal threshold.

There are a few other miscellaneous deductions, such as a mortgage, usually deducted from the estate's value before taxation. Family businesses and farms may be taxed at a lower rate. Inheritance taxes tend to be set up on a progressive scale, meaning as the value of the estate increases, the tax rate rises and the taxes increase exponentially.

 
Personalize & Print a Free CA Last Will Create This Document
Page 1
Page 2
Page 3
Page 4
Page 5
Page 6
Page 7
Page 8
Page 9
Page 10
 
Personalize & Print a Free CA Power of Attorney Create This Document
Page 1
Page 2
Page 3
Page 4
Page 5
Related Legal Services near Zip Code 90405
Pisarra David
1305 Pico Blvd
Santa Monica, CA 90405
(310) 664-9969
Corporation & Partnership Law Attorneys, Attorneys, Family Law Attorneys
Stan Stern
2941 Main Street # 200H
Santa Monica, CA 90405
(310) 487-9834
Divorce Attorneys,  Family Law Attorneys,  Personal Injury Law Attorneys,  Attorneys,  Business Law
Rosario Perry
312 Pico Blvd
Santa Monica, CA 90405
(310) 394-9831
General Practice Attorneys, Attorneys
Morrissey Marcia
2115 Main St
Santa Monica, CA 90405
(323) 933-8799
General Practice Attorneys, Attorneys
Paris & Paris
424 Pico Blvd
Santa Monica, CA 90405
(310) 392-8722
Attorneys, General Practice Attorneys, Legal Service Plans
Business Affairs Inc
2415 Main St
Santa Monica, CA 90405
(310) 954-8440
Entertainment & Sports Law Attorneys, Paralegals, Attorneys
Legal Grind
2640 Lincoln Blvd
Santa Monica, CA 90405
(310) 452-8160
Paralegals, Attorneys, Legal Service Plans
Hughes Jeffrey
2640 Lincoln Blvd
Santa Monica, CA 90405
(310) 452-8160
Paralegals, Attorneys
Dennis Hawk Law Offices
3100 Donald Douglas Loop N
Santa Monica, CA 90405
(310) 664-8000
General Practice Attorneys, Attorneys
Bronstein Marc A
3205 Ocean Park Blvd # 200
Santa Monica, CA 90405
(310) 450-7361
General Practice Attorneys, Attorneys
Rice Andrea
3420 Ocean Park Blvd # 3030
Santa Monica, CA 90405
(310) 450-6789
Franchise Law Attorneys, Attorneys
Kling Anthony
2308 Lincoln Blvd
Santa Monica, CA 90405
(310) 453-6287
Attorneys Referral & Information Service, Attorneys
Ghobrial Law Group
3301 Ocean Park Blvd # 205
Santa Monica, CA 90405
(310) 392-5960
Immigration Law Attorneys, Attorneys, Immigration & Naturalization Consultants
Steinberg & Spencer
2901 28th St Suite 230
Santa Monica, CA 90405
(310) 450-5960
Attorneys,  Personal Injury Law Attorneys,  Insurance Attorneys,  Product Liability Law Attorneys,  
Stephanie Ames
2800 28th Street, Suite 321
Santa Monica, CA 90405
(310) 739-5952
Kohrs & Fiske
3250 Ocean Park Blvd Ste 130
Santa Monica, CA 90405
(310) 452-5524
General Practice Attorneys, Attorneys, Legal Service Plans
Bailey & Partners
2800 28th St Ste 200
Santa Monica, CA 90405
(310) 392-5000
Attorneys, Legal Service Plans, Business Law Attorneys, Product Liability Law Attorneys, Litigation
Dunn & Associates
854 Pico Blvd
Santa Monica, CA 90405
(310) 393-2769
Personal Injury Law Attorneys, Attorneys
Stanley Martin
137 Bay St
Santa Monica, CA 90405
(310) 399-2555
Attorneys
Rafeek and Associates
2716 Ocean Park Blvd
Santa Monica, CA 90405
(310) 460-2315
Corporation & Partnership Law Attorneys, Attorneys, Labor & Employment Law Attorneys
GJEL Accident Attorneys
2800 28th St Ste 321
Santa Monica, CA 90405
(800) 840-2111
Accident & Property Damage Attorneys, Attorneys, Legal Service Plans
Stanley Martin
135 Bay St
Santa Monica, CA 90405
(310) 399-1581
Attorneys, Legal Service Plans
Gillin Phil
2800 28th St # 321
Santa Monica, CA 90405
(310) 314-1140
General Practice Attorneys, Attorneys, Legal Service Plans
12Law.com   |  NASHVILLE, TN USA   |  CONTACT US