Getting a step-up in basis when each spouse dies can be a big tax advantage. It has not been available to those who live in common-law states. However, it may now be–through a community property trust.
Avoidance of estate taxes is one consideration in estate planning.
Upstream basis planning is a trust strategy that can save wealthy people on their capital gains taxes and income taxes associated with highly appreciated assets.
Once more hesitant to plan ahead, clients in today’s environment are much more proactive and willing to take action in the near term, rather than waiting and risking having to pay higher taxes down the line.
In terms of federal tax law changes, the last year had much ado but little change.
There are many ways to pass property on to children, including gifting the family home to them while you are still alive, bequeathing it to the children upon your passing, or selling the residence to your heirs.
Unless you spend your winters in Aspen and your summers in the Hamptons, you probably don’t have to worry about paying federal estate taxes on an inheritance. In 2021, the federal estate tax doesn’t kick in unless an estate exceeds $11.7 million.
My great-grandfather was a farmer and had about 23 acres when he died. My grandfather passed away before my great-grandfather. The land was put in a trust for my mother and uncles. My mother passed away two years ago.
Have you considered transferring ownership of your home and wondering what records or paperwork is required? The reason for wanting to transfer will help determine how you should proceed.
President Biden’s proposal to eliminate the step-up for calculating inheritance taxes targets a tactic that has long been a wealth-preservation tool. What are some of the ramifications of the proposal and what, after political wrangling, could be the tax implications for large inherited assets?
