Tag Archives: transfers

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


Citizenship Can Impact Asset Transfers Between Spouses

Large asset transfers are taxable in the United States. We have a federal estate tax that carries a 40 percent top rate, and there is also a federal gift tax. The gift tax and the estate tax are unified, so they have the same rate. There is a relatively large unified lifetime exclusion that you can use to facilitate tax-free asset transfers up to a certain point. For the rest of 2015, the amount of this unified exclusion or credit is $5.43 million. Inflation adjustments are applied on an annual basis, so when a new year rolls around, you may see a slightly larger figure. Asset transfers that exceed the amount of this exclusion would potentially be subject to the federal estate tax, with one exception. If you are legally married in the eyes of the law, and you are married to an American citizen, you can use the unlimited marital deduction to transfer unlimited assets to your spouse free of taxation. Why would the citizenship stipulation be in place? Giving everything to your spouse tax

Are All Asset Transfers Subject to the Probate Process?

The probate process is something that you should understand when you are making estate planning decisions. Assets are not immediately distributed to the heirs in many instances. Some asset transfers are subject to the probate process, but some types of asset transfers would not go through the process. Before we define probate property, let s look at some asset transfers that would not be subject to the probate process. Living Trusts If you were to use a living trust as a vehicle of asset transfer instead of a last will, the trustee that you name in the trust agreement would be able to distribute assets in the trust to the beneficiaries outside of probate. This is one benefit that you would gain if you use a living trust as the centerpiece of your estate plan, but there are others. Insurance You name a beneficiary when you take out a life insurance policy on your life. After you die, the proceeds would be distributed to the beneficiary by the company. The probate process would not ente

Are All Asset Transfers Subject to the Probate Process?

The process of estate administration is something that you should gain an understanding of if you want to effectively plan your estate. Stating your wishes in writing is part of the equation, but actions must be taken after you pass away to bring these wishes to fruition. If you maintain direct personal possession of your property and you facilitate distributions through the terms of a last will, the executor will be forced to admit the will to probate. Probate is a legal process, and it takes place under the supervision of a court. Property that was in your direct and sole personal possession at the time of your passing could not be distributed until after the probate process was completed. There is an exception in the state of Connecticut. If the estate in question is valued at $40,000 or less, a simplified probate procedure could be utilized, and the full blown probate process could be avoided. Transfers Outside of Probate There are certain types of property transfers that would no