Inheritance Tax Myth Debunked

Many people have heard of estate taxes, and you may assume that an estate tax and an inheritance tax are the same thing. In fact, these are two different forms of taxation. In this post we will explain exactly who must pay inheritance taxes, and we will also look at the differences between an inheritance tax and an estate tax. Inheritance Tax An inheritance tax is levied on each individual asset transfer. If you named five different nonexempt inheritors in your last will, an inheritance tax could be levied on transfers to each respective heir. The good news is that there is no inheritance tax on the federal level, though there is an estate tax. Most of the states in the union do not impose inheritance taxes either, but there are a few states that do levy state-level inheritance taxes. Our firm practices law in the state of Connecticut, and there is no state-level inheritance tax in our state. For your information, the states that have state-level inheritance taxes are Maryland, Iowa,

Is the Estate Tax Applied on Transfers to My Spouse?

There are many things to take into consideration when you are planning your estate, and there are those who make mistakes that yield negative consequences, because they do not know all the facts. This certainly comes into play when it comes to taxation, especially in the state of Connecticut. You pay taxes all of your life, on virtually everything: your property, your purchases, your income, your capital gains, hotel rooms, gasoline, etc., etc., etc. It would be logical to assume that you can pass away free of taxation, but in many instances, this is not the case. In this paper we will look at taxation as it applies to your surviving spouse. Federal Estate Tax and the Marital Deduction We have a federal estate tax that is applicable in all 50 states. This tax carries a 40 percent maximum rate, so it can take a heavy toll on the financial legacy that you are leaving behind to your family members. The existence of the tax is the bad news; the good news is that there is an unlimited mari

Discuss Legacy Planning With Your Estate Planning Attorney

The process of estate planning can be looked at as a bare bones, basic necessity, or you could take things a step further. If you discuss things with an estate planning attorney, you will learn about the process of legacy planning. This is a conscious, proactive effort to make a lasting impact after you are gone. If you schedule a consultation with our firm, you can get a detailed explanation, but we will provide an overview in this blog post. Estate Tax Efficiency High net worth individuals must be aware of the potential impact of estate taxes. We practice in the state of Connecticut, and there is a state-level estate tax in our state. We also have to be concerned about the federal estate tax. This tax carries a hefty 40 percent maximum rate, and this can significantly reduce the wealth that you are passing along to your loved ones. The federal estate tax credit is $5.45 million during the 2016 calendar year. This is the amount that you can transfer to anyone other than your spouse b

There Is More to Estate Planning Than Planning a Will

Estate planning can seem like an exercise in planning a will. In fact, this is a misconception. There are different ways to facilitate asset transfers, and planning a will is not always going to be the best course of action. Plus, there are end-of-life issues to address when you are devising your estate plan. As a result, a last will is not the only document you need, even if you do use a will as your asset transfer vehicle. Let s look at the facts. Planning a Will If you use a last will to state your final wishes, you nominate an executor. This is the person who will administer the estate after you pass away. The executor would be required to admit the will to probate, and the court would supervise the administration of the estate. This is not inherently negative, but there are some pitfalls that go along with the probate process. For one, it is time-consuming. In most areas, a case that is not complicated in any way will be stalled in probate for close to a year. The inheritors rece

Choosing the Right Revocable Trust Trustee

A trustee is a person or entity who administers a trust. If you utilize a revocable living trust as your assets transfer vehicle, you can act as the trustee while you are alive and well. You can also serve as the beneficiary, so you could receive monetary distributions from the trust throughout your life. This arrangement is comforting to many people, because you do not surrender control of assets that you convey into a revocable trust. You can also revoke the trust entirely if you ever decide that you want to call the whole thing off and take back direct personal control of the assets that you conveyed into the revocable trust. You would be creating the trust as an estate planning tool, so you have to account for the things that will take place after you pass away. When you establish the trust declaration, you name a successor trustee to handle the business of the trust after you pass away. Successor beneficiaries would also be named in this document. A revocable living trust can pro

Connecticut Probate: Is There Any Way Around It?

Probate is a legal process that enters the picture if you have property in your sole and direct personal possession at the time of your death. During probate the probate court determines the validity of the will, and the court supervises the administration of the estate. Inheritances are not distributed until after the estate has been probated. The process provides certain protections, but the heirs to the estate may experience some negatives while the estate is being probated. One of them is the time factor. The process can run its course in a little bit less than a year under ideal circumstances. This can be a significant length of time when you are waiting for an inheritance. More complicated cases can take much longer. Cost is another consideration. There are a number of different expenses that can accumulate during the probate process. A third drawback is the loss of privacy. Anyone who wants to know how you distributed your assets can access probate records. Connecticut Probate

Hartford Golden Ager Newsletter Will Keep You Up To Date

Elder law attorneys assist clients who are looking ahead toward their golden years. There are legal and financial matters that should certainly be addressed, and many people are not aware of all of the potential costs that they may face toward the end of their lives. We practice law in Hartford, Connecticut. If you would like to stay up-to-date with regard to local news that is of interest to senior citizens in Hartford, you may want to access the Hartford Golden Ager Newsletter. This newsletter is produced by the town of East Hartford, and it is a great resource to tap into if you are a local senior citizen. The Top of the List There are a number of different elder law issues that are on the table at the present time, but without question, long-term care is at the top of the list. Medicare will provide health insurance for most senior citizens, but there are out-of-pocket expenses that you should prepare for in advance. These would include co-payments, deductibles, and premiums. For

Hartford Nursing Homes: Understanding Costs

The Medicaid program is something that you may not think much about if you are not financially needy. This is a jointly run federal/state government program that provides health insurance for people who can prove that they are largely without monetary resources. However, when you start to look ahead toward your senior years, Medicaid may find its way onto your radar. Read on to find out why. Nursing Home Costs The United States Department of Health and Human Services has stated that 70 percent of people reaching the age of 65 are eventually going to need help with their activities of daily living. Approximately 25 percent of people who are at least 85 are residing in nursing homes. Genworth Financial has been conducting an ongoing study that examines the state of long-term care around the United States. They have compiled statistics for every state, and they also have numbers for specific metropolitan areas. We practice law in Hartford, Connecticut. According to the study, in 2015, th

Top Five Reasons to Use a Living Trust

When you are making investments throughout your life, you do not make snap judgments. Clearly, you worked hard for the money that you have to invest, and you want to be sure that you are making the right decisions. This mentality should also be applied to the estate planning process. You would certainly do research before you decide to make an investment, and you should also look into your estate planning options so that you can make the right choices. If you do take some time to examine the estate planning tools that are out there, you may find that a revocable living trust is an appealing choice. These trusts are very effective when certain circumstances exist. Let s look at five reasons why you may want to use a living trust as your primary asset transfer vehicle. 1.) Probate Avoidance A lot of people feel as though a last will is the best estate planning device for people who are not extraordinarily wealthy. In reality, this is not necessarily true. When a will is used, there are

Can an Inheritance Disrupt Medicaid Eligibility?

Estate planning is a personalized endeavor, and it should be viewed as such. The idea that you can simply slice up a pie through the terms of a last will is a shortsighted perspective. There are many different tools in the estate planning toolkit, and you should make the appropriate choices so that everyone that you love is being provided for in the best possible manner. Medicaid and Supplemental Security Income This dynamic is very apparent when it comes to providing for a family member with special needs. Clearly, people with disabilities are going to require care and treatment that can cost a great deal of money. For example, someone with autism will typically accumulate lifetime medical bills that reach the seven figures. When you are looking at health care expenses of this magnitude, health insurance is a very big deal. Most of us get health insurance through our jobs, but people with disabilities are not going to be able to work in many instances. Under these circumstances, Medi