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 54023

A Primer on Estate & Inheritance Taxes in Zip Code 54023


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 WI 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 WI Power of Attorney Create This Document
Page 1
Page 2
Page 3
Page 4
Page 5
Related Legal Services near Zip Code 54023
Chier Law Office
111 S Pearl St
Berlin, WI 54923
(920) 361-9740
Attorneys, Real Estate Attorneys, General Practice Attorneys
Ninneman Mark W
8100 N 45th St
Milwaukee, WI 53223
(414) 371-9615
Attorneys
Patricia A Brown
9055 N 51st St
Milwaukee, WI 53223
(414) 354-7777
General Practice Attorneys, Attorneys, Legal Service Plans
Stein Martin R
9001 N 76th St # 310
Milwaukee, WI 53223
(414) 357-7555
Attorneys, Accident & Property Damage Attorneys, Corporation & Partnership Law Attorneys, General Pr
Safer Fredrick J
9001 N 76th St # 310
Milwaukee, WI 53223
(414) 357-7555
Probate Law Attorneys, Attorneys, Wills, Trusts & Estate Planning Attorneys
Safer & Stein Law Firm SC
9001 N 76th St
Milwaukee, WI 53223
(414) 357-7555
Employee Benefits & Worker Compensation Attorneys,  Attorneys,  Accident & Property Damage Attorneys
Total Attorneys - Criminal Defense
PO Box 273756
Bay City, WI 54723
(715) 201-4283
Attorneys, Criminal Law Attorneys, Legal Service Plans
Selsing John B
120 E Huron St
Berlin, WI 54923
(920) 361-4100
Attorneys,  Estate Planning, Probate, & Living Trusts,  General Practice Attorneys,  Real Estate M
Koch John C
115 S Wisconsin St # A
Berlin, WI 54923
(920) 361-3802
Attorneys, Elder Law Attorneys, Wills, Trusts & Estate Planning Attorneys, General Practice Attorney
Bankruptcy Law Office
5600 W Brown Deer Rd
Milwaukee, WI 53223
(414) 355-3540
Bankruptcy Law Attorneys, Attorneys, General Practice Attorneys
Hall, Timothy R
5600 W Brown Deer Rd
Milwaukee, WI 53223
(414) 355-3540
Attorneys,  Bankruptcy Services,  Probate Law Attorneys,  Bankruptcy Law Attorneys,  Debt Adjusters,
Polasek Mary Ann
7066 N 55th St Apt G
Milwaukee, WI 53223
(414) 760-3303
Attorneys
Behling Law Office
113 E Main St
Cambridge, WI 53523
(608) 423-3286
General Practice Attorneys, Attorneys
Rumpf Law Offices
152 W Main St
Cambridge, WI 53523
(608) 423-3254
Attorneys, General Practice Attorneys
Spoehr Smits & Blazel Atty
118 N Pearl St
Berlin, WI 54923
(920) 361-1777
Attorneys, Real Estate Attorneys, Legal Service Plans
Gutknecht & Gerdes
7008 W Good Hope Rd
Milwaukee, WI 53223
(414) 353-1730
Attorneys, General Practice Attorneys, Legal Service Plans
Gerdes Dale P
7008 W Good Hope Rd
Milwaukee, WI 53223
(414) 353-1730
Attorneys
12Law.com   |  NASHVILLE, TN USA   |  CONTACT US