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 Wellsville, NY

A Primer on Estate & Inheritance Taxes in Wellsville, NY


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 NY 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 NY Power of Attorney Create This Document
Page 1
Page 2
Page 3
Page 4
Page 5
Related Legal Services near Wellsville, NY
Russo Walsh & Walsh
122 W Main St
Johnstown, NY 12095
(518) 762-7016
Attorneys, Elder Law Attorneys, Wills, Trusts & Estate Planning Attorneys, Real Estate Attorneys, Pa
Brott Jason A Law Office
4 S Market St
Johnstown, NY 12095
(518) 762-6160
Bankruptcy Law Attorneys, General Practice Attorneys, Attorneys
Tabat Cohen & Blum
500 Montauk Hwy Ste N
West Islip, NY 11795
(631) 587-5100
Divorce Attorneys, Attorneys, Family Law Attorneys, Legal Service Plans, General Practice Attorneys
Wilson Robert
381 Garden St
West Islip, NY 11795
(631) 669-4980
Attorneys, Legal Service Plans
Maselli Nicholas
10 Thomas Pl
Valhalla, NY 10595
(914) 347-4556
Attorneys, Legal Service Plans
Arthur Carl Spring
10 S Market St
Johnstown, NY 12095
(518) 762-4503
Attorneys,  Accident & Property Damage Attorneys,  Patent, Trademark & Copyright Law Attorneys,  Ge
Lomanto Concetta
122 W Main St
Johnstown, NY 12095
(518) 762-4212
Attorneys Referral & Information Service, Attorneys
Felice Phil W
333 Sunrise Hwy
West Islip, NY 11795
(631) 893-3900
Attorneys, General Practice Attorneys
Lite Justin
212 Higbie Ln # 1
West Islip, NY 11795
(631) 669-3710
General Practice Attorneys, Attorneys
Hodgson Russ LLP
55 E Main St Ste 100
Johnstown, NY 12095
(518) 736-2900
Estate Planning Attorneys,  Attorneys,  Tax Attorneys,  Business Law Attorneys,  Real Estate Attorne
Total Brian
12 S Perry St
Johnstown, NY 12095
(518) 736-2498
General Practice Attorneys, Attorneys, Family Law Attorneys
Rodriguez, Stephen T - Rodriguez & Doern P
122 W Main St
Johnstown, NY 12095
(518) 736-2408
Social Security & Disability Law Attorneys,  Attorneys,  Bankruptcy Law Attorneys,  General Practice
Allen R Day
148 W Main St
Johnstown, NY 12095
(518) 736-1946
Attorneys, Criminal Law Attorneys
Ross Ellen S
105 N Perry St
Johnstown, NY 12095
(518) 736-1146
Attorneys,  Legal Service Plans,  Criminal Law Attorneys,  Family Law Attorneys,  Divorce Attorneys,
Joseph Mauro Law Office
306 McCall Ave
West Islip, NY 11795
(631) 669-0921
Attorneys,  General Practice Attorneys,  Family Law Attorneys,  Divorce Attorneys,  Bankruptcy Servi
Total Attorneys - Criminal Defense
PO Box 273749
Lockport, NY 14095
(716) 508-0905
Attorneys, Criminal Law Attorneys, Legal Service Plans
First Westchester Settlement
465 Columbus Ave # 120
Valhalla, NY 10595
(914) 366-0900
Real Estate Attorneys, Attorneys, Real Estate Title Service
Heckler Gerard V
8 S William St
Johnstown, NY 12095
(518) 762-0412
Attorneys, Criminal Law Attorneys, Divorce Attorneys
Brott Jason A Esq
2 S Market St
Johnstown, NY 12095
(518) 627-0202
Wills, Trusts & Estate Planning Attorneys,  Attorneys,  Criminal Law Attorneys,  Real Estate Attorn
12Law.com   |  NASHVILLE, TN USA   |  CONTACT US