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 91980

A Primer on Estate & Inheritance Taxes in Zip Code 91980


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 91980
May John K
421 Grand Ave
South San Francisco, CA 94080
(650) 827-9992
Attorneys, Criminal Law Attorneys
Pacelli Richard W
17662 Irvine Blvd # 12
Tustin, CA 92780
(714) 838-9800
General Practice Attorneys, Attorneys
One Legal Inc
18051 Irvine Blvd
Tustin, CA 92780
(714) 480-9797
Attorneys Referral & Information Service
Sheldon Michael J
17291 Irvine Blvd # 150
Tustin, CA 92780
(714) 558-9542
Attorneys,  General Practice Attorneys,  Criminal Law Attorneys,  Family Law Attorneys,  Divorce Att
Jane Bauer
1131 E Main St # 107
Tustin, CA 92780
(714) 730-9522
Attorneys, General Practice Attorneys, Legal Service Plans
Schrenker Law Firm
13522 Newport Ave # 201
Tustin, CA 92780
(714) 731-9500
Attorneys Referral & Information Service
Mentis Law Group
14751 Plaza Dr Ste J
Tustin, CA 92780
(714) 750-9447
Attorneys,  Legal Service Plans,  Bankruptcy Services,  Bankruptcy Law Attorneys,  Insurance Attorne
Peoples Immigration Cmnty Ctr
9121 Long Beach Blvd
South Gate, CA 90280
(323) 826-9440
Immigration Law Attorneys, Attorneys, Immigration & Naturalization Consultants
Gordon And Wong Law Group
510 Myrtle Ave # 102
South San Francisco, CA 94080
(650) 583-9399
Attorneys,  Legal Service Plans,  Business Law Attorneys,  Bankruptcy Services,  Bankruptcy Law Atto
Cronin Timothy
17822 17th St # 101
Tustin, CA 92780
(714) 505-9365
General Practice Attorneys, Attorneys
Milligan Samuel J
1254 Irvine Blvd
Tustin, CA 92780
(714) 544-9300
Attorneys, Legal Service Plans
Ricks Cecil E Jr
315 Centennial Way
Tustin, CA 92780
(714) 966-9190
Attorneys, General Practice Attorneys
Machiavelli W Law Office
2882 Walnut Ave
Tustin, CA 92780
(714) 669-8899
General Practice Attorneys, Attorneys, Legal Service Plans
Mosher Nelson H Jr
15600 Washington Ave
San Lorenzo, CA 94580
(510) 278-8854
Attorneys,  Probate Law Attorneys,  Bankruptcy Services,  Bankruptcy Law Attorneys,  Financial Servi
E. Thomas Dunn, Jr.
1432 Edinger Ave Ste 240
Tustin, CA 92780
(714) 258-8829
Western Intelligence Agency
7108 KATELLA AVA. SUITE 431
Stanton, CA 90680
(888) 250-8768
Paralegals, Process Servers, Legal Service Plans, Legal Document Assistance
Immigration Consulting Service
3116 Firestone Blvd
South Gate, CA 90280
(323) 587-8757
Immigration Law Attorneys, Immigration & Naturalization Consultants, Attorneys
Marvin M Oliver
13522 Newport Ave
Tustin, CA 92780
(714) 734-8700
Attorneys
D. Scott Carruthers
8448 Katella Ave
Stanton, CA 90680
(800) 495-8682
Attorneys, Collection Law Attorneys, Bankruptcy Law Attorneys
Kramer, Valerie L
507 E 1st St
Tustin, CA 92780
(714) 544-8600
Attorneys, Real Estate Attorneys
Martin Law Firm
1215 Monroe St
Red Bluff, CA 96080
(530) 527-8510
General Practice Attorneys, Attorneys
Ochoa Victor
919 Lynn Ct
San Lorenzo, CA 94580
(510) 261-8474
Attorneys
Rohani Law
151 Yorba St Suite 100
Tustin, CA 92780
(949) 545-8458
Credit & Debt Counseling,  Bankruptcy Law Attorneys,  General Practice Attorneys,  Attorneys
Tien Vincent
17291 Irvine Blvd # 152
Tustin, CA 92780
(714) 544-8436
General Practice Attorneys, Attorneys, Legal Service Plans
12Law.com   |  NASHVILLE, TN USA   |  CONTACT US