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 Portage, WI

A Primer on Estate & Inheritance Taxes in Portage, WI


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 Portage, WI
Miller Krista E
311 De Witt St
Portage, WI 53901
(608) 742-8585
General Practice Attorneys, Attorneys
Kreckman Todd A Law Office
111 E Edgewater St
Portage, WI 53901
(608) 742-6228
Attorneys, General Practice Attorneys, Legal Service Plans
Wegher Ann M
235 W Cook St
Portage, WI 53901
(608) 742-5336
Attorneys
Smiley William A
235 W Cook St
Portage, WI 53901
(608) 742-5336
Attorneys, Accident & Property Damage Attorneys, General Practice Attorneys, Legal Service Plans
Salna Vytas P
417 W Wisconsin St
Portage, WI 53901
(608) 742-4434
Attorneys, General Practice Attorneys
Rhode Tim R
219 E Conant St
Portage, WI 53901
(608) 742-4353
Attorneys, Family Law Attorneys, General Practice Attorneys, Legal Service Plans
Rhode Law Office
219 E Conant St
Portage, WI 53901
(608) 742-4353
Attorneys,  Family Law Attorneys,  General Practice Attorneys,  Legal Service Plans
Davis Jr Richard G
219 E Conant St
Portage, WI 53901
(608) 742-4353
Attorneys, Legal Service Plans
Kammer & Greiber Sc
702 De Witt St
Portage, WI 53901
800-769-0235
Attorneys,  Divorce Attorneys,  Real Estate Attorneys,  Personal Injury Law Attorneys,  General Prac
Sarbacker Steve
134 W Cook St
Portage, WI 53901
(608) 742-3331
General Practice Attorneys, Attorneys
Bennett Mark H
135 W Cook St
Portage, WI 53901
(608) 742-2109
Attorneys, Criminal Law Attorneys, General Practice Attorneys, Legal Service Plans
Carlson Rogers & Owens
234 1/2 W Wisconsin St
Portage, WI 53901
(608) 742-1905
Attorneys, Legal Service Plans
Kammer Douglas W
702 De Witt St # A
Portage, WI 53901
(608) 352-0928
Corporation & Partnership Law Attorneys, Attorneys, Family Law Attorneys, Accident & Property Damage
Hughes Dale E
311 E Wisconsin St # 203
Portage, WI 53901
(608) 745-0041
Attorneys, Social Security & Disability Law Attorneys, Corporation & Partnership Law Attorneys, Gene
12Law.com   |  NASHVILLE, TN USA   |  CONTACT US