What Is An Estate Tax?

Mon, 23 Jun 2008 21:45:37 GMT

The Estate Tax is a tax on the value of your property transfered to your hiers upon your death. The federal government allows every person to give away, either through lifetime gifts or upon death a certain maximum dollar value of property without being taxed. This is known as your Lifetime Exemption. The maximum amount of the lifetime exemption does change from time to time as determined by Congress. Any assets you own at your death that amount to more than lifetime exemption in place are then taxed at a progressive Estate Tax.

Certain transfers are not counted toward the lifetime exemption, such as a gifts of up to certain amounts made by you to any person per year, or gifts given to pay for tuition or medical expenses.

The Internal Revenue Code also allows married persons to gift, or leave at death, certain property to their spouse which may qualify for marital deductions, which may also be exempt from tax.

The estate tax laws can be complex and also vary from year to year in terms of the amount of available deductions or exemptions. Therefore, it is highly recommended that individuals or couples seek the advice of a qualified estate planning attorney to discuss which estate planning tools would best suit their particular situation. The attorney can recommend ways you can not only achieve your goals for your property upon death, but also help you to minimize estate tax liability to the fullest extent allowed under the applicable laws.

What Is The Difference Between A Will And A Trust?

Wed, 11 Jun 2008 19:54:22 GMT

A Will and a Trust serve different purposes. Most people don`t have either one. A Will and a Trust are similar in the effect that both let you designate exactly how you want your assets and other personal property to be distributed to your friends, family and other loved ones after you die. The difference between a Will and a trust is that a Will probates through probate court, but a trust doesn`t. A Trust is administered outside of the probate court after you die.

People prepare a trust to avoid paying these probate taxes. Generally, you would not need to prepare a trust to avoid probating your Will if you net assets amount to less than $1 million (This amount which is exempt from Federal Estate Tax increases to 1.5 million in 2004 and 2005, 2 million in 2006 through 2008, 3.5 million in 2009 and then in 2010 there is no federal estate tax. However in 2011 the Federal Estate Tax is returned to the 2002 level).

In this case, a Will would serve the same purpose as a trust because the federal tax laws do not tax a person`s asset for the first $1 million (different amount as noted above in subsequent years) after they die.

Free Durable Power Of Attorney FAQs

Fri, 27 Nov 2009 19:03:39 GMT

Free Durable Power Of Attorney FAQs

Free Estate Planning FAQs

Fri, 27 Nov 2009 19:03:39 GMT

Free Estate Planning FAQs

Free Estate Taxes FAQs

Fri, 27 Nov 2009 19:03:39 GMT

Free Estate Taxes FAQs

Free Guardianship FAQs

Fri, 27 Nov 2009 19:03:39 GMT

Free Guardianship FAQs

Free Power of Attorney FAQs

Fri, 27 Nov 2009 19:03:39 GMT

Free Power of Attorney FAQs

Free Probate FAQs

Fri, 27 Nov 2009 19:03:39 GMT

Free Probate FAQs

Free Trusts FAQs

Fri, 27 Nov 2009 19:03:39 GMT

Free Trusts FAQs

Free Wills FAQs

Fri, 27 Nov 2009 19:03:39 GMT

Free Wills FAQs