People who have been able to accumulate a significant store of wealth should be very aware of federal transfer taxes. In this post we will look at an often overlooked tax called the generation-skipping transfer tax. However, to understand the generation-skipping transfer tax, you need some background information about the the estate tax and the gift tax. Federal Death Tax The federal estate tax carries a 40 percent maximum rate, and this is an attention-getting number. There is … [Read more...] about What Is the Generation-Skipping Transfer Tax?
Taxes
What Is a Step-Up in Basis?
You may be concerned about taxes when you are planning your estate. What forms of taxation will your loved ones face after you pass away? In this post we will provide answers, and we will ultimately focus on the capital gains tax and the step-up in basis. Income Tax It can seem as though any income that you receive from any source should be reported on your annual income tax return. In fact, this is not the case when it comes to inherited assets. If you receive an … [Read more...] about What Is a Step-Up in Basis?
When Is an Estate Tax Return Due?
When you start to plan your estate in earnest, you may wonder if you have to file an estate tax return. You do not have to file an estate tax return unless the taxable value of your estate exceeds the amount of the federal estate tax exclusion. Let's look at the details so that you can proceed in an informed manner. Parameters of Federal Estate Tax Everyone does not have to file an estate tax return because there is a federal estate tax credit or exclusion. This is the line that … [Read more...] about When Is an Estate Tax Return Due?
What Is a Grantor Retained Annuity Trust?
Estate planning takes on an added layer of complexity when you are faced with federal estate tax exposure. To determine your position relative to the estate tax, you must compare the value of your estate to the federal estate tax credit or exclusion. For the rest of 2014, the federal estate tax exclusion stands at $5.34 million. You can transfer this much tax-free, but transfers that exceed this amount are potentially subject to the death tax and its 40 percent maximum … [Read more...] about What Is a Grantor Retained Annuity Trust?
Indianapolis Wealth Preservation: What Is a QDOT Trust?
Your estate plan should be custom crafted to suit your needs. Every family is different, and there is an ideal solution for every situation. With this in mind, let's look at the estate planning device called a QDOT trust. The acronym QDOT stands for a qualified domestic trust. This type of trust would be useful for a high net worth individual who is married to someone who is not an American citizen. Federal Estate Tax Parameters To understand the value of a QDOT trust you … [Read more...] about Indianapolis Wealth Preservation: What Is a QDOT Trust?
What Is Estate Tax Exclusion Portability?
It is important to understand the law of the land when it comes to the federal estate tax when you are planning your estate. Assets that you intend to transfer to your heirs are potentially subject to taxation. However, there is a federal estate tax credit or exclusion. Your estate would not be subject to the death levy if its value does not exceed the amount of the exclusion. The federal estate tax exclusion was set at $5 million for 2011, and there have been ongoing adjustments … [Read more...] about What Is Estate Tax Exclusion Portability?
What Is an Irrevocable Life Insurance Trust in Indianapolis?
To understand the value of an irrevocable life insurance trust, you must first absorb some background information about the federal estate tax. The federal estate tax can be a factor if you pass away with an extremely valuable estate. In 2014, the estate tax credit or exclusion is $5.34 million. This is the amount that can be passed on free of the death tax. Anything that you are transferring that exceeds this amount is potentially subject to taxation. When you are determining the … [Read more...] about What Is an Irrevocable Life Insurance Trust in Indianapolis?
What Is a QTIP Trust?
Each estate planning situation is unique, and there are various different solutions that can be implemented to match the circumstances in question. Trusts are often part of the equation. There is a type of trust called a QTIP trust that can be useful for those who are getting remarried after having children from a previous marriage. In this post we will provide some basic information about QTIP trusts. (The QTIP acronym stands for qualified terminable interest … [Read more...] about What Is a QTIP Trust?
Will My Heirs Be Forced to Pay an Inheritance Tax?
There are various different taxes that can be imposed on asset transfers. The federal government has its own tax code, and each state has the right to levy taxes as well. Exactly what you are exposed to is going to vary depending on a number of factors. These would include the state within which you live or own property, the relationship that you hold with the respective inheritors, and the amount of the asset transfers in question Estate Tax vs. Inheritance Tax You may … [Read more...] about Will My Heirs Be Forced to Pay an Inheritance Tax?
White House Releases 2015 Budget; Estate Tax Changes Proposed
Estate planning attorneys emphasize the fact that planning your estate is a dynamic process. It is not a "one and done" affair. You should create an ongoing relationship with your estate planning lawyer and be prepared to make changes to your plan over the years as things change. Changes to the tax code could render your existing estate plan obsolete. With this in mind, you should be aware of some of the changes to the estate tax parameters that have been proposed within the … [Read more...] about White House Releases 2015 Budget; Estate Tax Changes Proposed
