What is a death tax? Inheritance tax? What will the government take from my family when I pass away?
The likelihood of your estate being subject to either gift or estate tax is minor; in fact, less than 1% of all Americans owe any estate tax on their passing. Everyone eventually dies, but 99%+ do not owe any tax relating to their death. This is due to a very large lifetime exemption amount. Tax laws change frequently so it is important to check in with your estate planning attorney and tax professionals regularly. If the lifetime exemption amount ($13+ million in assets exempted as of year 2023) is eliminated or lowered, then your estate may owe a tax. But as of today in 2023, less than 1% of Americans would be subject to an estate tax.
So why do the 99%+ of Americans need estate planning? Because probate fees and costs and other negative consequences with this public court proceeding affects everyone who passes away, regardless of how much money was in their estate when passing away. This means their loved ones, typically spouse, children, family, and close friends, will inherit a lot less money than if a proper estate plan was put in place to avoid this process called probate. In addition to having a will and a trust to avoid probate, everyone should have an advance healthcare directive and a durable power of attorney in place for unexpected situations.
Talk to a licensed estate planning attorney at Yu & Yu Law today for a free personalized consultation.
