Planning the future for your loved ones


Estates and Taxes

Like the end of life, taxes are also inevitable when your estate is passed on. There are five ways your estate may be taxed after you die, three of which will be paid by your beneficiaries and two by your estate.

TaxDescriptionWhen AssessedWhen DuePayor
Gift TaxA tax on any gift to one person more than the limit for the year it was givenAt the time of the giftOn April 15th the year after your deathThe estate
Estate TaxA tax on the right to transfer property above a designated federal and/or state limit to anyone but your spouse or minor childrenAfter your death9 months after your deathThe estate
Income TaxA tax on any gift before your death or income the beneficiary earns from your estate after your deathAt the time of the giftOn April 15th the year after the income is receivedThe recipient or beneficiary
Capital Gains TaxA tax on the difference you paid for an asset and the value when inherited

A tax on the difference between the assets worth when inherited and what it is sold for by the beneficiary
At the time of the inheritance or saleOn April 15th the year after your death or the asset is soldThe beneficiary
Inheritance taxA tax levied on your assets that are inherited by anyone not your spouse or child.After your deathAfter your deathThe beneficiary

The laws governing estate and gift taxes are quite complex, change frequently, and do not apply to all of your assets.

In 13 states you will be subject to both federal and state estate tax. There is variability from state to state in the estate value limit and which assets are taxable. States also differ about whether same-sex couples and domestic partners are defined as spouses.

Others have inheritance tax and one state even has both. Your beneficiaries may also be subject to income taxes and capital gains taxes if they make any profit from your estate. Because of all this, you may require professional help to sort things out, especially if your estate is over the federal estate tax limit of $11,580,000 or in some cases your state’s estate tax limit, which can be as low as $1 million.

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