The federal estate tax is a very big factor for people who have been highly successful from a financial standpoint. There is a line in the sand that is drawn between people who must pay the tax and those who are exempt. It exists in the form of the federal estate tax credit or exclusion. During the current calendar year, the amount of the federal estate tax exclusion is $5.43 million. This can sound like a good bit of money, but you have to remember the fact that your real property, your … [Read more...] about Should I Use My Estate Tax Exclusion During My Lifetime?
There are numerous different steps that you can take to facilitate postmortem asset transfers. Some of them are more effective than others, and one very limited possibility is the payable on death account. This is a type of account that you can open at a bank or brokerage. To a large extent, the way that it works is self-explanatory. You add a beneficiary when you create a payable on death or transfer on death account. After you die, the beneficiary assumes ownership of anything that may remain … [Read more...] about What Is a Payable on Death Account in California?
There are a number of different ways to make sure that your loved ones receive your property after you pass away. Joint tenancy is one possibility. Co-Ownership of Property If you own property, you could choose to add a co-owner to the title or deed of the property. This person would become a joint tenant in legal parlance. To provide a simple example, let's assume that you own your home outright. You want your son to inherit your home after you pass away, so you add him to the title as a … [Read more...] about What Is Joint Tenancy?
In the United States, there are taxes that can be imposed on large asset transfers. We have a federal estate tax, and the tax carries a rather hefty 40 percent maximum rate. The reason why we say that the tax is applicable on large asset transfers only is because there is an estate tax exclusion. This exclusion stands at $5.43 million in 2015. If the value of your estate is less than the amount of this exclusion, it would not be subject to the estate tax. In addition to the federal estate … [Read more...] about What Is the Annual Gift Tax Exclusion?
There are certain misconceptions that circulate with regard to estate planning. One of them is the belief that trusts are only useful for very wealthy people. High net worth individuals do have a unique set of estate planning concerns. Asset transfers that exceed the amount of the federal estate tax exclusion can be taxed at a maximum rate of 40 percent. At the time of this writing late in 2015, the estate tax exclusion stands at $5.43 million, but it is going up to $5.45 million next year … [Read more...] about Are Trusts Only for the Rich?