When a person passes away without an estate plan and have left assets behind, the probate process will likely be required. Probate determines the distribution of a decedent’s assets after their death. This process is overseen by the probate court and can address various legal issues, including those related to estate taxes. Dealing with these issues can be overwhelming, especially for those who have never been through probate proceedings.
Fortunately, a skilled lawyer could explain the estate tax on Irvine probate cases during a private consultation. Additionally, a knowledgeable probate attorney could evaluate your circumstances and determine the best steps to take for you and your family.
What Are Estate Taxes?
Probate involves an inventory and appraisal of a deceased person’s assets and property. This calculation determines the total value of the decedent’s estate. Based on the size of the assets, the estate may owe taxes. If estate taxes are owed, the taxes must be paid before releasing it to the designated beneficiaries.
That said, there are some exemptions to this rule when it comes to the value of a U.S. citizen or green card holder’s estate. These exemptions change yearly; however, as long as the estate does not exceed the amount, it will not be taxed.
In addition to determining the taxes owed by the decedent, a probate lawyer could assess the total value of the estate and work to minimize or avoid estate taxes. Reducing taxes could involve gifting property or acquired assets to heirs before an individual’s death or collect funds from a life insurance policy to pay their estate taxes, rather than being forced to sell the decedent’s hard-earned assets.
Federal Probate Taxes
Federal taxes also come into play when the probate process is initiated. The final tax return for both federal and state taxes must be filed within nine months after the decedent’s death. However, if the estate’s value is less than the exemption amount, beneficiaries are not required to pay taxes.
A dedicated probate lawyer in Irvine can help when determining estate taxes owed by working with an accountant or CPA to file the final tax return. By providing an inventory and appraisal of the decedent’s assets and property, the legal representative can ensure that all necessary information is available to file the final tax return properly.
Tax Obligations for Beneficiaries
Any taxes owed during probate are deducted from the decedent’s overall estate: the estate’s personal representative or beneficiary is not required to pay anything from their own pocket. However, the beneficiary may inherit less than they are entitled to due to the deduction of taxes.
A lawyer in Irvine could find ways minimize the amount of estate taxes that the beneficiary must pay during probate proceedings. Doing so could allow the beneficiary to collect the full value of the estate as the decedent intended.
Call an Attorney in Irvine to Learn More About the Estate Tax on Probate Cases
Probate can be a complicated process, especially when it comes to taxes. By hiring a probate lawyer in Irvine, you can ensure that the process is efficient and done correctly. A skilled legal team member could help calculate the amount of taxes the estate owes and help beneficiaries collect as much inheritance as possible.
State and federal taxes on probate in Irvine can be a daunting subject. However, a diligent and experienced legal representative could ensure that the process is handled correctly. Call today to schedule a consultation.