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 49793

A Primer on Estate & Inheritance Taxes in Zip Code 49793


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 MI 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 MI Power of Attorney Create This Document
Page 1
Page 2
Page 3
Page 4
Page 5
Related Legal Services near Zip Code 49793
Grubbs & Grubbs
801 N Main St
Three Rivers, MI 49093
(269) 273-9511
Legal Service Plans, Estate Planning Attorneys, Attorneys, Criminal Law Attorneys, Family Law Attorn
Frego & Assoc
30800 Van Dyke Ave
Warren, MI 48093
(586) 619-9432
Bankruptcy Law Attorneys, Attorneys
Hammel Dave
11662 Martin Rd Ste D
Warren, MI 48093
(586) 755-9300
Attorneys, General Practice Attorneys, Legal Service Plans
Law Offices
28345 Beck Rd Ste 406
Wixom, MI 48393
(248) 344-8980
General Practice Attorneys, Attorneys
Robert J Dutka Law Office
1201 N Main St
Three Rivers, MI 49093
(269) 273-8402
Attorneys,  Wills, Trusts & Estate Planning Attorneys,  Real Estate Attorneys,  General Practice At
Russi & Penna Law Firm
11662 Martin Rd
Warren, MI 48093
(586) 757-8330
General Practice Attorneys, Attorneys
Acclaim Legal Services
8900 Thirteen Mile Road
Warren, MI 48093
(866) 261-8282
Bankruptcy Law Attorneys, Credit Repair Service, Foreclosure Services
Bernstein & Bernstein
30500 Van Dyke Ave Ste 101
Warren, MI 48093
(586) 573-7766
General Practice Attorneys,  Attorneys,  Malpractice Law Attorneys,  Social Security & Disability La
Kostopoulos & Associates P
30800 Van Dyke Ave
Warren, MI 48093
(866) 969-7482
Bankruptcy Law Attorneys, Attorneys, Legal Service Plans
Met Legal
8593 Estate Plaza Dr
Warren, MI 48093
(586) 751-7380
Paralegals
Modelski Sophie
8326 E 12 Mile Rd
Warren, MI 48093
(586) 486-7202
Attorneys,  Legal Service Plans,  Bankruptcy Law Attorneys,  Bankruptcy Services,  Financial Service
Cusmano Frank G
30500 Van Dyke Ave # 101
Warren, MI 48093
(586) 573-6700
Attorneys, Legal Service Plans
Jennifer M Smith PC
49357 Pontiac Trl # 202
Wixom, MI 48393
(248) 960-5665
Divorce Attorneys, Attorneys, Legal Service Plans
Smith Steven E
18555 Fort St
Riverview, MI 48193
(734) 284-5544
General Practice Attorneys, Attorneys
O'Malley J Patrick
801 Portage Ave
Three Rivers, MI 49093
(269) 279-5159
General Practice Attorneys, Attorneys
Total Attorneys - Personal Injury
PO Box 274292
Wixom, MI 48393
(248) 714-4892
Attorneys, Legal Service Plans
Groth Elowsky Kelley Pawlak & Seglund PLC
28345 Beck Rd Ste 306
Wixom, MI 48393
(248) 624-4505
Estate Planning Attorneys,  Attorneys,  Legal Service Plans,  Personal Injury Law Attorneys,  Insura
Josephine R Sbrocca
29204 Hoover Rd
Warren, MI 48093
(586) 751-4421
Attorneys,  Divorce Attorneys,  Bankruptcy Law Attorneys,  Family Law Attorneys,  Legal Service Plan
Taylor Sean M
27007 Hoover Rd
Warren, MI 48093
(586) 756-3880
Insurance Attorneys, Attorneys, Criminal Law Attorneys, Legal Service Plans
Total Attorneys - DUI
PO Box 274133
Wixom, MI 48393
(248) 264-3821
Attorneys, Legal Service Plans
Harrington John F
30500 Van Dyke Ave # M200
Warren, MI 48093
(586) 751-3610
General Practice Attorneys, Attorneys, Legal Service Plans
Eugene Nasal
17735 Fort St
Riverview, MI 48193
(734) 281-3610
Insurance Attorneys,  Attorneys,  Criminal Law Attorneys,  Labor & Employment Law Attorneys,  Social
Barnes Law Office Pc
303 N Main St
Three Rivers, MI 49093
(269) 273-2327
Insurance Attorneys, Attorneys, Legal Service Plans
Kostopoulos and Associates
30500 Van Dyke Ave
Warren, MI 48093
(586) 920-2269
Bankruptcy Law Attorneys, Attorneys
12Law.com   |  NASHVILLE, TN USA   |  CONTACT US