Do you have assets that you plan to pass on to your loved ones? Are there baby boomers in your family with substantial assets that will pass as part of their estate? Whatever your situation, you need to estate planning and an understanding of inheritance options to reflect on its impact on your life.
A recent study found that Americans will inherit $764 billion this year, the vast majority of that money passing on tax-free. This is according to a paper recently published by the Brookings Institution. Current laws around inheritances mean that Americans and their estates are required to pay for 40% on bequests and gifts to heirs. However, there are multiple ways to avoid this tax, since the tax-exempt level for a married couple is $23.2 million.
The Brookings Institution paper indicates that there is a potential proposal being put forward to tax income from inheritances at higher rates than income from work. The estimated proposal, according to those who created it, could raise as much as $1.42 trillion in the next decade.
Although this proposal is not currently adopted and does not affect your estate planning now, it is important to have an established relationship with an experienced estate planning attorney who can help you adjust if and when estate level and federal level tax changes occur.
Our Virginia Beach estate planning law office stays up to date with all relevant state and national laws and the impacts they have on your estate planning.