Death Taxes

Real People. Real World Advice. Real Results.

What are Death Taxes?

There are two types of death taxes: federal estate tax and state inheritance tax. Let’s start with the good news. Many states, including California and Nevada, have abolished the inheritance tax. However, the federal estate tax still exists and if applicable to your estate, it’s one of the largest taxes you and your family will ever have to pay.  At its essence, the federal estate tax is a tax on your right to transfer property to others at your death. Currently, the federal estate tax rates start at 41% and quickly rise to 50% of every dollar in your estate over the exemption amount.

What is the current exemption amount and what does that mean?

Presently, the exemption amount for an in individual is $5,600,000 and for a married couple it is $11,200,000 in 2018. That means that if your estate at the time of your death is less than the exemption amount, $5.6 million or $11.2 million respectively, there will be no federal estate taxes due. In deciding whether your estate is greater or less than the exemption amount, the IRS includes everything you own, even the face value of your whole life insurance policies.

Is there an Estate Tax Deduction for married people?

Yes.  In addition to the exemption that everyone gets, the federal government has exempted all transfers of wealth between a husband and wife.  This is called the Uniform Marital Deduction and it means that regardless of the size of your estate there will be no federal estate taxes levied when the first spouse dies and leaves the estate to the surviving spouse.  Keep in mind, however, that this is merely a postponement of tax.  There will be a tax on the estate of the surviving spouse when it passes to the children or other beneficiaries.

WARNING: There is no unlimited marital deduction for surviving spouses who are not U.S. Citizens.  Without special planning, all non-citizen spouses are restricted to the tax-free transfer of the personal exemption amount (currently $11.2 million).

How can I create a Living Trust?

The first step is to make an appointment for a free, no obligation meeting with one of our estate planning professionals.  Once you decide to work with us, you should be prepared to discuss the following issues:

  • How your assets are to be distributed after your death, and
  • The names of the people you want to manage your assets if you become incapacitated, and after your death.
Please contact us to schedule a Free 30 minute phone consultation.
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René Nourse – Urban Wealth Management

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I went to Norton Basu after I found out that I needed to have a trust in addition to our will. Somita and Zakiya were so personable, it was a breath of fresh air coming from lawyers. They were very knowledgeable and answered all of our questions on the spot. We had no clue of all the planning we needed to have in place. They gave us recommendations and even met with us to sign the final papers in a location that was more convenient for us. I would not hesitate to refer these ladies to anyone in need of Estate Planning. If you want to get real results with real people, call them up. They can even help if you are out of state!

Jenny Williams