Will My Loved Ones Have to Pay Taxes on My Estate?

That, of course, all depends upon when you die, the value of your estate and who you leave your assets to.

There is no estate tax for those who pass away in 2010 but it is expected to return in 2011 and, unless Congress steps in and makes changes, it will come back with a $1 million dollar exemption, considerably lower than the $3.5 million in 2009.

But even if the estate tax does come back, only assets that exceed the exemption amount will be subject to the tax. If you have a modest estate, you may not need to worry about this tax at all. Of course, your state may impose a separate estate tax on assets at a lower value.

In addition, assets left to your spouse are not subject to estate tax, regardless of the value, so you can bequeath as much as you like to your better half without worrying about the IRS.

It’s not unusual to discover that your estate is worth much more than you realized, especially when you factor in retirement plans and the death benefit of your life insurance policies. There are certainly ways to minimize the amount of taxes your beneficiaries could potentially pay, but to do this, you’ll need the assistance of a qualified estate planning attorney.

Larry Parman
Attorney at Law