Estate-Related Taxes You Need to Know About
Part of the Estate Planning For Dummies Cheat Sheet
Depending on the value of your estate, you may not have to deal with at least some of the federal taxes, but you or your surviving beneficiaries may have a substantial amount of tax-related paperwork to file. When estate planning, use these tips to understand what you're dealing with from a tax standpoint:
Most people don't have to pay the federal estate tax — the so-called "death tax" —because their estates fall below the federal threshold. But your estate may still be subject to state inheritance or estate taxes.
The federal gift tax and the federal estate tax are part of a unified tax system, so you need to pay attention to both of these taxes as you plan your overall estate tax strategy.
The little-known Estate Recovery Act can devastate your estate if you need to tap into certain types of government-paid health care. But you can protect your estate if you understand the rules.