The Situations In Which Your Beneficiaries May Need To Pay Estate Taxes
If you have a set of assets you wish to give your beneficiaries, you can develop an estate plan that distributes those assets to them. But, depending on the facts underlying your estate and estate plan, they may need to pay estate taxes.
Going over the situations in which your beneficiaries may need to pay estate taxes, and speaking with an experienced estate planning lawyer, will allow you to protect your estate.
Will Your Beneficiaries Need To Pay Estate Taxes?
The answer to this question is dependent on the assets that comprise your estate.
If your estate has assets that are collectively worth more than $13,610,000, then your beneficiaries will need to pay estate taxes on these assets.
On the other hand, if your estate has assets that are worth less than that amount, it is very unlikely your beneficiaries will need to pay estate taxes on your assets.
Outside of what has been clarified above, there is one more thing to note: inherited property is not considered income in Florida, which means that there is no need to pay taxes on the property.
Even though the above is true, there are a few situations in which your beneficiaries may need to pay taxes.
What Are The Situations In Which Your Beneficiaries May Need To Pay Taxes?
Out of all the situations in which your beneficiaries may need to pay taxes, due to receiving the assets that comprise your estate plan, the following are some of the most common:
- If your beneficiaries receive a piece of property that produces income, then this income could be taxed at some point.
- If your beneficiaries sell property that they inherited from you – a home, for example – then this property could be subject to the Federal income tax.
- If your beneficiaries receive property from you, but one of them is not a United States citizen, this could lead to tax complications within their home country.
- If your beneficiaries withdraw funds from your retirement accounts, then there is a chance that these funds could be taxes.
- If your beneficiaries receive an inheritance that generates income prior to being transferred to them, any gains they receive as a result may be taxed.
The above are entirely dependent on the assets that comprise your estate and, in turn, what your beneficiaries choose to do with those assets.
If you give your beneficiaries assets that do not generate income, then it is unlikely that your beneficiaries will need to deal with the above.
On the other hand, if your beneficiaries sell any of your property, and this property appreciates in value before the sale, then there is a chance they may need to pay taxes.
Speak With A Florida Estate Planning Lawyer Today
If you would like to develop an estate that protects your assets, obtaining legal help is one of the best things you can do. Speak with a Florida estate planning lawyer at Millhorn Elder Law Planning Group today and we will help you develop the best possible estate plan.
Sources:
law.cornell.edu/wex/estate_tax
irs.gov/businesses/small-businesses-self-employed/estate-tax