Changes to taxes on gross estates

On Behalf of | Mar 27, 2019 | Estate Administration And Probate |

When a person dies in Georgia or another state, the sum of their possessions both in and outside the United States is subject to estate taxes. These possessions, known as their gross estate, don’t just include physical property. Bank accounts, investments, annuities and even unaccounted for gifts are subject to estate taxes. If the total amount of these assets is greater than the federal estate tax exemption, the executor of the estate is required to file form 706. This may even be true even if no taxes are owed.

In 2017, the exemption for the estate tax changed: It was raised from $5.49 million per person, $10.98 million for a married couple, to $11.18 million per person or $22.36 million for a married couple. This estate tax generally applies to citizens and legal residents of the United States. In some circumstances, nonresidents may be required to pay estate taxes as well.

When an executor files form 706, they are required to pay the amount due within nine months of the date of death. An automatic extension of six months is available to file if needed by the executor. Accounting for all a client’s assets, both within the country and abroad, can take a long time.

Families who are trying to figure out how to reduce their overall tax burden may benefit from the support and guidance of an attorney who practices estate administration and probate. There are a variety of financial instruments, including trusts, that could be used to transfer assets to heirs without incurring large tax penalties. It’s the responsibility of attorneys to keep up to date with all changes to estate tax law for the benefit of their clients.