Estate Tax PlanningEstate planning is the systematic process of using the most effective and efficient methods for the accumulation, preservation, and distribution of the estate assets according to wishes of the owner of an estate, while minimizing the effect of:
Probate
* Probate is a legal process that takes place after someone dies. It includes:
* Proving in court that a deceased person's will is valid (usually a routine matter)
* Identifying and inventorying the deceased person's property
* Having the property appraised
* Paying debts and taxes, and
* Distributing the remaining property as the will directs.
Typically, probate involves paperwork and court appearances by lawyers. The lawyers and court fees are paid from estate property, which would otherwise go to the people who inherit the deceased person's property. The probate fee is based on the value of the estate and it can be substantial.
From filing to closure, the process may take up to 18 months. Costs (court fees, legal & accounting expenses and executor/representative fees, etc) usually range from 3% to 5% of the total estate.
The following is an average probate cost reference:
Estate taxes are taxes based on the value of the estate you leave when you die. Estates valued at more than $675,000 in 2000 [Federal Estate Return: if estate exceeds $1,500,000 (2004), $1,500,000 (2005), $2,000,000 (2006), $2,000,000 (2007), $2,000,000 (2008), $3,500,000 (2009), Repealed (2010), $5,000,000 (2011)], are subject to the federal estate tax. Some states use lower limits, but other states charge no estate taxes at all. Any estate taxes that are due are usually paid for by the estate itself. This sets them apart from inheritance taxes, which are state taxes that your heirs may be required to pay on the property they inherit. For more information consult IRS Publication 950 Introduction to Estate and Gift Taxes, or order by calling (800) 829-3676.
Basic example of how to minimize estate taxes is provided here for your reference only. To properly plan your estate consult a professional.
Tax considerations are usually a significant part in the effort of probating the estate. At the death of the owner, the estate plan functions to distribute the estate with minimum administration costs and taxes according to the wishes of the owner. Minimizing the cost of distributing an estate can only be accomplished by anticipating expenses and planning ways to avoid them before death occurs.
From filing to closure, the process may take up to 18 months. Costs (court fees, legal & accounting expenses and executor/representative fees, etc) usually range from 3% to 5% of the total estate.
The following is an average probate cost reference:
PROBATE FEES
| Estate Assets | Probate Fee |
|---|---|
| $ 40,000 | $ 3,150 |
| $ 50,000 | $ 3,850 |
| $ 60,000 | $ 4,550 |
| $ 70,000 | $ 5,250 |
| $ 80,000 | $ 6,000 |
| $ 90,000 | $ 6,650 |
| $100,000 | $ 7,350 |
| $125,000 | $ 9,188 |
| $150,000 | $ 9,683 |
| $175,000 | $12,010 |
| $200,000 | $12,863 |
| $225,000 | $13,183 |
| $250,000 | $14,350 |
| $300,000 | $16,683 |
| $400,000 | $21,350 |
| $500,000 | $30,000 |
Estate taxes are taxes based on the value of the estate you leave when you die. Estates valued at more than $675,000 in 2000 [Federal Estate Return: if estate exceeds $1,500,000 (2004), $1,500,000 (2005), $2,000,000 (2006), $2,000,000 (2007), $2,000,000 (2008), $3,500,000 (2009), Repealed (2010), $5,000,000 (2011)], are subject to the federal estate tax. Some states use lower limits, but other states charge no estate taxes at all. Any estate taxes that are due are usually paid for by the estate itself. This sets them apart from inheritance taxes, which are state taxes that your heirs may be required to pay on the property they inherit. For more information consult IRS Publication 950 Introduction to Estate and Gift Taxes, or order by calling (800) 829-3676.
Basic example of how to minimize estate taxes is provided here for your reference only. To properly plan your estate consult a professional.
Tax considerations are usually a significant part in the effort of probating the estate. At the death of the owner, the estate plan functions to distribute the estate with minimum administration costs and taxes according to the wishes of the owner. Minimizing the cost of distributing an estate can only be accomplished by anticipating expenses and planning ways to avoid them before death occurs.
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