There are people who don’t understand the importance of legal advice when they are considering the subject of estate planning. They reason that arranging for the transfer of assets to their loved ones after they pass away should be a simple matter that anyone can handle on his or her own.
Perhaps this line of thinking makes some sense on the surface, but the powers that be present obstacles that can be confusing and costly to the uninitiated. With this in mind you would do well to understand a little bit about the federal estate tax and the Indiana inheritance tax.
If your assets exceed the exclusion amount your estate is subject to a federal death tax that carries a 35% rate at the present time. This exclusion amount is $5.12 million as of this writing, but it is scheduled to be reduced to $1 million at the beginning of next year.
In addition to this, there are some states that have an inheritance tax and Indiana is one of them (though it has recently been announced that it is going to be slowly phased out).
Inheritance tax is imposed after the federal estate tax has been levied on the entirety of the estate. Each of the heirs to the estate must pay this levy on his or her inheritance. In Indiana your spouse is totally exempt exempt, but your other relatives may be subject to the tax.
These multiple layers of taxation can be a source of concern, but there are ways to mitigate your exposure. If you would like to explore your options with regard to tax efficiency solutions, simply take a moment to arrange for a consultation with a licensed and experienced Indianapolis estate planning lawyer.
Mr. Kraft assists clients primarily in the areas of estate planning and administration, Medicaid planning, federal and state taxation, real estate and corporate law, bringing the added perspective of an accounting background to his work.