There are taxes that can be imposed on your assets after you pass away if certain circumstances exist. Just how many levels of taxation there are to contend with is going to vary depending on where you reside.
Everyone in all 50 states must be concerned with the federal estate tax. This levy carries a 35% maximum rate at the present time, and the exemption amount is $5.12 million. So only the portion of your estate that exceeds this exempt amount is subject to the 35% death tax.
Before you assume you are safe because your assets fall within this exemption, you should recognize the fact that these parameters are going to change at the end of the year if current laws remain in place. In 2013 the exemption goes down to $1 million and the rate rises to 55%.
Some states also impose a separate estate tax of their own that is levied against your assets in addition to the federal estate tax. Oklahoma is not among them though we did have an estate tax on the state level that was repealed.
And then there is the inheritance tax. This is a tax on what a beneficiary receives. Each heir to an estate must pay on his or her inheritance. Once again, we are fortunate here in our area because there is no inheritance tax in Oklahoma at the present time.
Doing what you can to mitigate your tax exposure is essential when you are preparing your assets for eventual distribution to your heirs. The best way to go about it is with the assistance of a licensed, experienced, and savvy Oklahoma City estate planning lawyer.
Larry Parman
Author, President and Founding Attorney
Parman & Easterday
Latest posts by Larry Parman, Attorney at Law (see all)
- Consequences of Modifying an Irrevocable Trust - October 16, 2019
- What Is the Uniform Transfer to Minors Act? - October 15, 2019
- Trusts for Privacy - October 9, 2019
