12Law Arrow 12Law Arrow  Easy Questions  
12Law Arrow 12Law Arrow Instant Legal Documents
 
 
FINANCIAL & MARITAL

Cohabitation Agreement coming soon!
Separation Agreement coming soon!
No-Fault Divorce coming soon!
Bankruptcy coming soon!
 
 

A Primer on Estate & Inheritance Taxes in Elmore, MN

A Primer on Estate & Inheritance Taxes in Elmore, MN


Me and my dad are the biggest promoters of an estate tax in the US. It's not a popular position.
 
- Bill Gates


When you die, you leave your home, your possessions, your money, and other things of monetary value to spouses, children, family members, friends, charity or religious institutions. The government wants its share. Some argue that estate taxes can provide for future generations. Others argue that is robs inter-generational businesses of the capital they need to keep growing.

Your estate may be subject to inheritance tax, estate tax, state and federal tax statutes, and a host of exemptions that can pass more of the estate to inheritors of your choosing.

What are the differences between Estate Taxes and Inheritance Taxes?

Let's start with estate tax. Your estate is the total of your possessions and debts left behind when you die. An executor, either named in the will or appointed by law, will pay off outstanding debts, cover funeral expenses, and administrative costs (e.g. executor's fees). If necessary, executors may liquidate property to pay taxes, debts, or fees. After federal and state estate taxes are paid, the remainder goes to the heirs. So, the estate tax is a tax on the total amount of the estate, after creditors are paid but before any heirs get their bequest. The tax is paid by the estate itself.

Inheritance tax occurs after the heirs receive their payouts. It is a tax on the amount received and is paid by the heir. Inheritance taxes are levied by the states. This means that in many cases an estate is taxed twice -- first by the federal estate tax, then by the state inheritance tax.

The estate includes cash on hand, bank accounts, financial assets (stocks, bond, mutual funds, etc.), real estate, automobiles, boats, art pieces or rare collections, personal property, debts owed to the estate, business interests, etc. An estate is made up of all of these things. An appraiser will determine the fair market value of everything to determine the taxable value of the estate.

Inheritance Tax Exemptions

For large estates, sophisticated estate planners will work with the family and utilize trusts, charitable donations, non-taxable gifts and other techniques to meet the family's needs and minimize the tax burden.

For small estates, there are exemptions are applied to the taxable amount before estate taxes are collected. Exemptions can be relation based and amount-based.


There is an exemption when the estate is passed from a deceased person to their US citizen spouse. It will not be subject to any federal estate tax. States that levy an estate tax generally follow the federal government's rules for this, as well. If the estate is passed to children, siblings or golfing buddies, the exemption doesn't apply.

Amount-based exemptions are $5.34 million for an individual, $10.68 million for a couple as of 2014. It is indexed for inflation, so it will probably grow over time.

State inheritance taxes vary a great deal and can make things much more complicated. There might be exemptions for some family members, or different tax rates depending on whether you are a spouse, a child or just a friend. Many states tie their inheritance tax directly to the federal estate tax and exemption rate. Some have much lower thresholds than the federal threshold.

There are a few other miscellaneous deductions, such as a mortgage, usually deducted from the estate's value before taxation. Family businesses and farms may be taxed at a lower rate. Inheritance taxes tend to be set up on a progressive scale, meaning as the value of the estate increases, the tax rate rises and the taxes increase exponentially.

 
Personalize & Print a Free MN Last Will Create This Document
Page 1
Page 2
Page 3
Page 4
Page 5
Page 6
Page 7
Page 8
Page 9
Page 10
 
Personalize & Print a Free MN Power of Attorney Create This Document
Page 1
Page 2
Page 3
Page 4
Page 5
Related Legal Services near Elmore, MN
Espe Law
4525 Allendale Dr
Saint Paul, MN 55127
(651) 426-9980
Attorneys, Legal Service Plans
Massie Law, PLLC
PO Box 270144
Vadnais Heights, MN 55127
(612) 605-9806
Estate Planning Attorneys
Van House & Associates P A
200 Village Center Dr Ste 800
Saint Paul, MN 55127
(651) 255-9500
Attorneys, Legal Service Plans
Consumer Justice Center PA
367 Commerce Ct
Saint Paul, MN 55127
(651) 967-9289
Attorneys, Consumer Law Attorneys
Herring Legal PLLC
4124 Quebec Ave N Suite 303
Minneapolis, MN 55427
(612) 460-8001
Wills, Trusts & Estate Planning Attorneys,  Attorneys,  Small Business Attorneys,  Business Law Att
Thomas Atkinson
855 Village Center Dr #390
Saint Paul, MN 55127
(877) 719-7696
Attorneys, Employee Benefits & Worker Compensation Attorneys, Labor & Employment Law Attorneys
Weber & Leth PLC
38 W Main St
Dodge Center, MN 55927
(507) 374-6355
Corporation & Partnership Law Attorneys, Attorneys, Criminal Law Attorneys, Family Law Attorneys, Bu
Nethercut James R
4527 Allendale Dr
Saint Paul, MN 55127
(651) 426-6300
General Practice Attorneys, Attorneys
Heins Scott P
4527 Allendale Dr
Saint Paul, MN 55127
(651) 426-6300
Attorneys
William Hensen & Assoc P
7500 Highway 55 # 100
Minneapolis, MN 55427
(763) 398-5800
Estate Planning Attorneys, Attorneys, Legal Service Plans
Davisson & Assoc
4124 Quebec Ave N # 306
Minneapolis, MN 55427
(763) 355-5678
Attorneys, Legal Service Plans
Davern Mc Leod & Mosher Llp
7500 Highway 55 Ste 150
Minneapolis, MN 55427
(763) 545-5600
Estate Planning Attorneys,  Attorneys,  Legal Service Plans,  Real Estate Attorneys,  Personal Injur
Stephen J. Beseres
4124 Quebec Ave N
Minneapolis, MN 55427
(763) 533-4999
Social Security & Disability Law Attorneys, Attorneys, Legal Service Plans
Sjb
4124 Quebec Ave N
Minneapolis, MN 55427
(763) 533-4916
Attorneys, Legal Service Plans
Family Life Bridge
855 Village Center Dr # 3
Saint Paul, MN 55127
(651) 815-4103
Family Law Attorneys, Attorneys
Lemaire Patent Law Firm
8009 37th Ave N
Minneapolis, MN 55427
(952) 278-3500
General Practice Attorneys, Attorneys, Legal Service Plans
Vacura James L
405 4th Ave NW
Dodge Center, MN 55927
(507) 374-2752
Attorneys
Kohler Law
4525 Allendale Dr
Saint Paul, MN 55127
(651) 426-1869
Attorneys, Legal Service Plans, General Practice Attorneys, Labor & Employment Law Attorneys
Budge Law Offices
1042 Centerville Cir
Saint Paul, MN 55127
(651) 426-1360
General Practice Attorneys, Attorneys, Legal Service Plans
Patrick Elgin PLLC
PO Box 270876
St. Paul, MN 55127
(612) 424-1357
Criminal Law Attorneys, Family Law Attorneys, Wills, Trusts & Estate Planning Attorneys, General Pra
Minnesota Disability
855 Village Center Drive
Saint Paul, MN 55127
(651) 414-0678
Personal Injury Law Attorneys, Social Security & Disability Law Attorneys
12Law.com   |  NASHVILLE, TN USA   |  CONTACT US