Do I Need To Worry About Estate Tax?
Estate planning is the process of organizing your financial and personal interests so that your wishes are met with a minimum of inconvenience and expense to your family. Estate planning also can assure that your estate incurs the minimum possible estate tax. The following is some general information regarding estate taxes:
- The federal estate tax is imposed on the transfer of an individual's property at death.
- The decedent's taxable estate equals the value of the total property transferred at death (the "gross estate") reduced by authorized deductions.
- The gross estate can contain property interests of all kinds, including life insurance, jointly owned property, and under certain circumstances, property the decedent gave away before death.
- The estate tax return must be filed within nine months after the date of the death.
- There has been an increase in the amount of property that you can leave your heirs free of estate tax. For estates settled in 2014, this allowance is $5,340,000. In 2015, it's been increased to $5,430,000.
If you have additional questions concerning the tax implications of a living trust or estate taxes, AllLaw.com recommends that you consult with a licensed tax professional.