Most people are under the impression that they will not trigger the federal estate tax implications for their assets after they pass away. This is because these federal taxes are for extremely large estates.
Bear in mind that those rules can change and that you may not be incorporating the full value of all your different assets, such as real estate beyond your primary home that may easily tip you into a higher estate tax category in certain situations.
Many people won’t have to worry about paying estate taxes, but it is valuable to understand inheritance state by state and federal level taxes. Estate planning often incorporates conversations with your estate planning attorney about the best way to reduce or eliminate inheritance, estate or gift taxes. These three levels of taxes to think about include:
- Inheritance taxes, which determines what your beneficiaries have to pay on any inheritance they receive. Some states tax inheritance and others don’t.
- State by state. If your estate is valued below a federal exemption amount, there is still the possibility that your state has estate taxes that may be applied.
- Federal level. If you believe you have an estate that exceeds federal limits, this is a good opportunity to work with an estate planning lawyer to create a plan for this.
Legal implications are just one level of things to consider in your estate as you plan for the future. At our Virginia Beach law office, we work with individuals, couples, and families to create customized estate plans. These estate plans address your needs now, but can also be altered in the future as your life circumstances change.