How are Estates Taxed?
Federal gift and estate tax laws permits each taxpayer to transfer a certain amount of assets free from tax during his or her lifetime or at death. (In addition, as discussed here, certain gifts valued at $10,000 or less can be made that are not counted against this amount.) The amount of money that can be shielded from federal estate or gift taxes is determined by the federal unified tax credit. The credit can be used during your lifetime when you make certain gifts, and the balance, if any, can be used by your estate after your death.
Keep in mind that while you can plan to minimize taxes, your estate may still have to pay some federal estate taxes. What's more, your estate may be subject to state estate or inheritance taxes. An estate planning professional can provide more information regarding state taxes.
Federal gift and estate tax laws permits each taxpayer to transfer a certain amount of assets free from tax during his or her lifetime or at death. (In addition, as discussed here, certain gifts valued at $10,000 or less can be made that are not counted against this amount.) The amount of money that can be shielded from federal estate or gift taxes is determined by the federal unified tax credit. The credit can be used during your lifetime when you make certain gifts, and the balance, if any, can be used by your estate after your death.
Keep in mind that while you can plan to minimize taxes, your estate may still have to pay some federal estate taxes. What's more, your estate may be subject to state estate or inheritance taxes. An estate planning professional can provide more information regarding state taxes.