Are there more taxes in retirement that are dreamt of in your estate plan? When we talk about planning for our golden years, we talk about sources of income and how to plan for emergencies. Many of us have sat through difficult dinner table conversations about additional care needs and how we want our final illness handled.
Love and marriage, soup and sandwiches, tax planning and estate planning -- some things just naturally go together, and now is a good time to sit down and look all of it over. Just before the holidays may be an especially good time to review an estate plan. Some of us are feeling more generous, more charitable toward our families before we spend Thanksgiving and Christmas with them.
Michael Jackson's music lives on, and, apparently so do the problems with his estate. The entertainer died more than five years ago, but the IRS is still trying to determine -- and collect -- the tax on the estate. Remember, Jackson died in California, so the only estate tax obligation is to the federal government.
Many of the country’s wealthiest families live in the state of California. And many of these families have been involved in disputes with the Internal Revenue Service over estate taxes following the death of a loved one.
Here in California and in a majority of states across the country, the state government no longer charges an estate tax to residents. Estate tax, often referred to as the “death tax” by critics, is sometimes considered a redundant tax since the assets in an estate have typically already been taxed as income or have been subject to property tax or capital gains taxes at some point.
Estate planning is not often an item that California readers see in the headlines, except for when an estate planning issue with a celebrity or other public figure makes the news. We can learn a lot from these examples about what sorts of contingencies to plan for and what sorts of unexpected issues may come up.
The conflict between the Internal Revenue Service and the estate of legendary pop singer Michael Jackson continues as the IRS announces huge penalties for the alleged purposeful undervaluing of the estate. We covered this issue in a post last year when it first came to light that there was a valuation issue.
Estate taxes and tax issues are a big part of planning and creating a will and or a set of trusts and other types of transfers. Taxes are often at the top of someone’s mind when they consider how to pass along assets to the next generation because there is a natural desire to try to preserve as much as possible for children and grandchildren.
As we have discussed in previous blog posts, this summer's Supreme Court ruling that allows same-sex marriages to be recognized by the federal government has had a big impact on couples in California. Since same-sex marriage is legal here, couples who choose to marry are eligible for state and federal benefits, including the many tax benefits afforded to married couples.
After this summer's landmark Supreme Court decision striking down the Defense of Marriage Act, many same-sex married couples in California celebrated the ability to be recognized as married under federal law. One of the big impacts of this change is in the area of tax law, where same-sex couples can now file joint federal returns, qualify for certain tax breaks, and qualify for the estate tax benefits such as the marital exemption.