Inheritance Taxes
This section needs updating

In 2009 there was no federal inheritance tax on estates worth $3.5 million or less. However, Congress has let this exemption expire and currently there is NO federal inheritance tax on the books. Almost all tax experts believe a federal inheritance tax will be re-enacted by this summer, and it may be retroactive to January 1, 2010. In the meantime, one needs to consider the 20 states where there is a state inheritance tax in effect, with Massachusetts being one of them.

Many wills were written with the federal tax in mind. For example, a clause stating that you wish to leave the "maximum amount excluded from federal tax" to your children and the rest to your second wife, now leaves $0 to the kids and everything to the wife. Twelve states have introduced legislation to remedy this, but this may only apply if there is a spouse contesting the will. In New York a clause dividing money between relatives and a charity are not subject to the legislation. In Florida a judge can try to determine what the deceased wanted if the will is contested. Many people set up their primary residence in Florida which has no income or estate taxes. However, Florida is considering chasing a piece of any inheritance tax obtained by another state on property (like a second house) in Florida. This could raise you legal and accounting fees.

On 03/14/10 the NY Times described these problems and offered some solutions No Federal Estate Tax, but What About Your State? - NYTimes.com.

<– Previous Page ––– Next Page –>