The federal government imposes no estate taxes on any property you leave to your surviving spouse, provided that he or she is an American citizen. And thanks to legislation enacted in 2001, you can leave some fairly large amounts to persons other than your spouse without incurring federal estate taxes. For example, in 2003 as much as $1 million of your estate is exempt from any estate taxes. This amount will increase periodically until the year 2010, when all federal estate taxes are supposed to be repealed. Whether or not that will actually come to pass remains to be seen, however, since Congress gave itself the right to reinstate these taxes in the future.
Some states impose inheritance taxes, which are payable not by the estate's beneficiaries. However, most provide relatively large exemptions for spouse and surviving children. On the other hand, if you leave property to more distant relatives, or to someone unrelated to you, the amount of the inheritance tax assessed can be fairly large. In some states, the amount of inheritance tax charged to an unrelated beneficiary can be 17 percent or even more.Your Estate Plan
Before we begin, however, it's important for you to know that the whole field of estate planning is extremely complex. Federal and state estate and inheritance tax laws are a jumble for even the experienced lawyers, and interpretations of these laws vary widely. In addition, as the federal and state governments look for more ways to get their hands on your money, the likelihood that the current laws will be revised in ways that will cost you and your loved ones a bigger share of the wealth you have accumulated over the years increase almost every day.
If your estate is large, it's probably a good idea to get some professional, up-to-the minute advice about planning your estate. And you may be surprised as just how large your estate may be.
Although the primary purpose of this site is to help you recognize, understand and even deal with legal problems without the need for a lawyer's help, there are times in just about everyone's life when a lawyer's assistance is going to be necessary. You should consider hiring a lawyer when:
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You are charged with driving Under the Influence (DUI) or a similar offense that could result in the loss of driving privileges or imprisonment.
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You are charged with any criminal violation or served with a civil lawsuit.
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The state notifies you that it wants to take your home or other real estate you own under its condemnation powers.
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You are asked or feel pressured to sign any document you do not fully understand or with which you do not agree, especially in regard to settling an insurance claim.
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Your insurance company refuses to pay what you believe is a legitimate claim.
Understandably, the best time to find a lawyer is when you don't have an immediate need for one. By taking your time and interviewing several attorneys, you have a much better chance of finding one with expertise in the areas of law that affect your life most often, as well as one who with whom you feel comfortable discussing your personal legal matters. A lawyer chosen at the last minute may turn out to be extremely competent and completely capable of helping you with your legal problems. On the other hand, he or she may lack the experience you need and the personality traits you prefer.
Your Estate
Your estate is made up of all the property you own, or in which you have some ownership interest at the time of your death. Under federal estate tax law, your estate consists of your individual property, your share in jointly owned property, life insurance, pension benefits, death benefits, property you transferred to another while you were still living, but which you maintained control of, and anything else you own when you die, such as your right to the repayment of debts that are owed to you. Debts and taxes that you owe to others are also considered a part of your estate, and must be paid out of your assets after you die.
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