Death Taxes
Categories: Tax, Trusts and Estates
With the latest Robin Hood film, we once again are shown a hero who stood up to unjust government policies. Robin Hood’s M.O. of “robbing from the rich to give to the poor” was a reaction to the serial shakedown taxation practiced by Prince John and the Sheriff of Nottingham. Death Taxes are a controversial practice that allows the Federal government to take 40% of an estate’s valuation upon someone’s death. Depending on the state of domicile, the estate’s beneficiaries may be subject to inheritance taxes as well, further depleting the deceased’s hard-earned money. These taxes are referred to as death taxes because they are enacted when someone dies, and the Federal and State government may wind up “double dipping."
While strategies exist for transferring assets to beneficiaries in increments before one dies, these techniques often require a CPA to make sure they are 100% compliant, otherwise they can be disallowed.
Related or Semi-related Video
Finance: What is Intestate/probate?6 Views
Finance a la shmoop what does it mean to die intestate and have your estate go
into probate? alright people if you die with no will your said to have died
intestate you're will-less sort of like a remote-controlled zombie spirit and this [Person holding remote and zombie appears]
is bad if you had any dough left over at the end of your you know journey or at
least bad for your would-be heirs why well because with no direction as to
where to leave your financial leavings the state grabs it more or less thank
you very much and if an heir does materialize well then your money has to
go through probate which is like amature bait only it costs money so
probate itself is the first step in dying financially or at least settling
your state when you're you know doing backstroke Six Feet Under [Ghost man performing back stroke under the ground]
specifically in probate proceedings the court acknowledges that your will
whichever version your lawyers would present to the court is in fact your
will and is representative of what you wanted your last dying wishes in giving
away your money to be what can happen with poor estate planning well just ask
actor James Gandolfini and well you can ask but he probably won't answer [Grave stone appears of James Gandolfini]
Gandolfini that guy died in 2013 and when he did his family had to deal with
two shocks the shock of his parting and the shock of how royally he had screwed
up his estate and estate planning not giving five minutes thought to his heirs
who you know he could have taken care of instead of everything going to
Gandolfini's intended beneficiaries roughly thirty million dollars in taxes
would end up going to the IRS and those guys didn't even attend the funeral [Man appears from an office desk]
because Gandolfini hadn't been specific as to where the money went well there
was four million in take out taxes for this probate proceeding and eight
million for that and then he hadn't transferred a little bit of money each
year to his heirs till all of it got taxed at a state tax rates which are
very high and then it ended up not even actually going to the people he wanted
like his kids and others who we loved and
instead it went to a whole lot of government bureaucrats so yeah intestate
is bad it puts your heirs in a difficult litigation situation forcing them to [Judge banging gavel]
endure a ton of taxes in grief in addition to their uh you know grief