Taxes are an important consideration during probate. An estate tax is the tax the federal government levies on you in exchange for the right to pass your assets to beneficiaries. If you have no beneficiaries, the government will keep your assets.

You may believe your assets are valued far below the federal exemption, but it can be hard to have a full understanding of this situation without legal help. The government counts everything you own among your assets, not just your home and bank accounts. A lawyer with experience handling the estate tax in Tustin probate cases could provide invaluable assistance during this time. Work with a knowledgeable probate attorney to ensure your future is in good hands.

Understanding Estate Taxes

The estate tax is also called a death tax and is taken by the government based on an estate’s value before beneficiaries receive what was left to them. Estates consist of all personal possessions. To be taxed, an estate must be worth $12.92 million for one person or $25.84 million for a married couple, as of 2023. The top estate tax rate for estates that exceed the above amounts is 40 percent.

A lawyer could provide more insights into what estate taxes might look like for a particular person.

Portability of the Estate Tax Exemption

Married couples can take advantage of something called “portability,” which allows a spouse to transfer all or part of their estate tax exemption to the surviving spouse. When one spouse dies but does not use any or all of their estate tax exemption, the surviving spouse can transfer and add it to their exemption. When the surviving spouse dies, the increased estate tax exemption allows them to leave more assets tax-free to heirs and other beneficiaries.

Qualifying for Portability

To qualify for portability, the deceased spouse must have been a U.S. citizen or legal resident. The surviving spouse must also file a federal estate tax return within nine months of the spouse’s death, whether taxes are owed or not.

Our Attorneys Could Advise You about Estate Taxes in Tustin Probate Cases

It is possible that your estate will not have to pay estate taxes. The federal government allows you to transfer up to $12.92 million to your beneficiaries before estate taxes of up to 40 percent will be due. California does not levy an estate tax on decedent’s assets.

You may also be able to take advantage of portability, in which a deceased spouse’s exemption, in whole or in part, can be transferred to the surviving spouse. A spouse who lives several more years would have the advantage of a larger exemption when they die and gift beneficiaries.

If you have questions regarding estate tax in Tustin probate cases, give us a call. Our dedicated legal team is happy to walk you through your options.

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Amity Law Group, LLP

Amity Law Group, LLP