How do you make out a will to protect against estate or state taxes?

[kimmerspixelated]

Didn't they change the laws? Have any of you done this recently?

[BrklynLiberal]

1. Why should you? Why should your descendents live off the money you worked your ass off to earn?

Let them earn their own. Ask Warren Buffett.

Either give it to them while you are still alive or let your estate pay the taxes.

http://www.reuters.com/article/idUSN1442383020071114

http://www.trustsestateslaw.com/2009/05/warren-buffett-and-bill-gates-on-the-estate-tax/

http://www.commondreams.org/headlines01/0214-01.htm

http://en.wikipedia.org/wiki/Warren_Buffett
Taxes

Buffett stated that he only paid 19% of his income for 2006 ($48.1 million) in total federal taxes (due to their being from dividends & capital gains), while his employees paid 33% of theirs, despite making much less money.<121> On the other hand in 2008 Berkshire Hathaway paid $1.9 billion in federal corporate income taxes on $7.5 billion in earnings (more than 26% in federal taxes alone).<122> Buffett favors the inheritance tax, saying that repealing it would be like "choosing the 2020 Olympic team by picking the eldest sons of the gold-medal winners in the 2000 Olympics".<123> In 2007, Buffett testified before the Senate and urged them to preserve the estate tax so as to avoid a plutocracy.<124>

[Greyhound]

2. I see that the old "depends on who's ox is gored" argument still holds. n/t

[dems_rightnow]

3. Leave it to a charity

100% unlimited deduction.

Other than that, you're going to need a trust.

[taterguy]

4. Step 1

Don't rely on anonymous idiots on a message board for legal advice

[NoPasaran]

19. Best advice ever!

[elleng]

5. 'Gifts' may work; check with specialists.

[Warpy]

6. You can't. Your heirs will have to file Fed and state estate tax forms

and there's no way out of it, even if you're not leaving them anything but your debts.

However, what you can avoid is probate and the best way to do that is setting up a revocable living trust, with everything transferable at your death. You make it revocable just in case one of your heirs doesn't want to wait and raids the till.

A paralegal can help you set it up.

Probate takes forever and there is a cast of dozens, all with their hands out to collect their fees. This is what you want to avoid, not any taxes your heirs will need to pay.

[ThomWV]

12. Only if the estate is valued at over $3,500,000 - otherwise no filing at all.

I believe it was $3,500,000 but I believe we are still within the window where no inheritance taxes at all are due from any estate no matter how large.

Look ,far less than 1% of all estates are subject to any tax at all.

On Edit: Changed number from five to three point five million

[kimmerspixelated]

13. Do you understand probate taxes? Are they different?

[DURHAM D]

14. Right now -

I believe there are no federal estate taxes. I believe that after December 31, 2010 the exemption is $1M for someone without a spouse.

JFTR - I read a few days ago that even though there is currently no federal estate tax the estate may have to pay capital gains taxes instead. Wouldn't that be interesting?

[Warpy]

16. If you're planning to croak in the next few months, maybe

but after the first of the year, the estate tax will reset.

In any case, I had to file the damn form (and it was a stinker) when my dad died, even though I came in well under the $2,000,000 limit at the time. They still want you to file, even if every column is zero.

[Curmudgeoness]

18. Kind of right, unless you live in PA, or some other states with

estate taxes on just about any size of estate.

[treestar]

25. those fees aren't going to be so much that they exceed the

fees for the revocable trust, and a lawyer should do that, not a paralegal - even if it is simple to set up, one needs real legal advice to determine if it will have the effect desired.

[TheKentuckian]

7. Pay them

[ThomWV]

8. Dam near no one has to pay inheritance taxes - no one.

[Duckhunter935]

9. How much is the question, depends on that

[david13]

10. What you should do is consult with and obtain the services of an

Attorney at Law, licensed to practice, in your area, who has experience with these types of things.
You should not depend on the services of a paralegal, a notary, someone you meet in a bar, etc.
Living trusts are complicated matters and have to be done right, or they don't do what you want.
So do it right. Otherwise it won't work.
A licensed, experienced Attorney.
dc

[jaksavage]

11. wiki wiki wiki

there is a unified credit against the tentative tax which effectively eliminates any tax on the first $3,500,000 of the estate

If your estate is worth more than 3.5 million, get a laywer.

[Geoff R. Casavant]

15. You need to understand which laws apply, and how.

The federal estate tax will be back next year, you can pretty much count on it, but only a small percentage of estates will be large enough for this to be a problem. If yours is one of them, then you have to structure your estate plan to take advantage of the many legal exemptions and deductions available.

State taxes may also apply, and if they do, you need to know if they are tied to the federal tax (the so-called "pick-up" tax) or are independently determined. State inheritance tax laws may also have deductions and exemptions to explore.

Bottom line, if you expect your estate will be close to or more than $1 million (including the life insurance you leave behind), you need to consult a professional.

[dixiegrrrrl]

17. Die broke. Problem solved.

[Obamanaut]

20. "Attorney" comes to mind. nt

[MineralMan]

21. First, you go talk to an attorney in your state.

This is not a legal advice forum or a medical advice forum. If you have legal questions, consult an attorney in your state. There, you will get advice that is appropriate for your situation. Here, you will get miscellaneous advice that will not apply to your situation very well, and could cost you and your heirs a great deal of money.

[treestar]

26. +1

Like the advice of friends and colleagues around the water cooler. One would hardly follow their medical advice so it's amazing how people will get "legal" advice from anyone off the street.

Even if the friend did have the same legal problem, that might only involve apparent similarity!

[MineralMan]

27. Even if a DUer were an attorney, answering legal questions on

a political forum isn't appropriate, and few attorneys I know would even think of doing so. Preparing a will can be a complex process, depending on the size of the estate. I can't believe some of the questions people ask here, and the answers they get are even more bizarre. Uff da!

[treestar]

30. At a law school graduation one speaker made a very good statement to the audience

"If you want free advice from these new graduates at parties and family gatherings, remember, you get what you pay for."

:rofl:

[treestar]

22. I never fully understood it, but

you have to pay the tax, unless you can find a way to set it up so it looks like you don't have the amount that triggers the tax. There was an exemption for what you leave your spouse up to an amount - used to be 600K - there was some way they could make a trust for that amount and then the rest of their estate, if worth less than 1.2 million, would avoid the tax.

They could also make gifts to their heir during their lives, annually, that were in amounts just below the amount that triggered the gift tax - though that hardly is any fun for control freak ancestors! "I'll leave you out of my will" loses its force!

[pitohui]

23. if you have millions of dollars and need to worry abt this, suggest you get a lawyer

otherwise why are you worried abt estate taxes? it affects only multi millionaires

if you can't afford a lawyer and must ask the internet, your "estate" is not going to owe any taxes, it's pretty simple

[Chemical Bill]

24. Don't worry about taxes, nursing homes take most people's money. n/t

[ProgressiveProfessor]

28. You can defend against that too, its called assert burn down and it works

[ProgressiveProfessor]

29. Hire a pro for this

The rules change almost annually. Those in the field are quite a bit better at it than those making the changes. If you have assets to protect, pay the bill and smile.

[SoCalDem]

31. Step one: see a lawyer

Laws vary and most inheritances are NOT taxed, unless you are very rich and/or the assets are SOLD!

This is the ONE thing that drives me NUTS when the righties go on about the "family farm having to be sold to pay the taxes)

a.........farms do OWE property taxes, no matter who "owns" them

b........when Dad/Grandpa ran the farm he was a single owner, but once he died and passed it on to MANY heirs, it HAS to be sold, unless they all want to quit their jobs/lives & go back to the farm & run it

c........many times there are DEBTS attached to farms, so of course they have to be paid, so boo-hoo to the whiny "kids" who object to "losing" any part of their inheritance