In our last post, we began looking at the importance of proper estate planning, and specifically planning carefully so that the inheritance received by heirs isn't depleted by the need to pay off estate taxes.
One of the important facets of estate planning is proper tax planning. Knowing what is included in your taxable estate will enable you to properly plan so that your heirs aren't stuck selling their inheritance to pay off taxes.
In our previous post we discussed some of the political infighting surrounding the federal estate tax. Democrats generally want to increase the tax and lower the individual exemption, and republicans generally favor a lower estate tax with a higher individual exemption.
A $363,053 federal tax bill that a widow received caused the Obama administration to stop defending the Defense of Marriage Act, which bars the U.S. federal government from recognizing same-sex unions.
Although Georgia does not currently have an estate or inheritance tax for 2011, an increasing amount of states impose their own estate or inheritance taxes in addition to the federal estate tax. Many states tax at a rate of 16 percent and exempt $1 million or less per estate from taxation.