Estate Planning Tip: Watch Out for State Taxes

When people begin estate planning, they probably think about the federal estate tax (commonly referred to as the “death” tax). However, a lesser-discussed tax issue is state estate and inheritance taxes. This is a complex, state-based issue and it’s advisable for you to sit down with an experienced estate planner to make sure your plan takes into consideration potential state taxes. Some states collect estate taxes and while other states collect inheritance taxes (some actually collect both). You may be thinking, “what the heck is the difference between an estate tax and an inheritance tax?” Well, an inheritance tax is based on who receives a deceased person's property and how the beneficiary is related to the deceased person. An estate tax is based on the value of the deceased person's estate and not on who gets what, according to the Memphis Daily News. State tax laws are always changing, so...

20 November

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Estate Planning Tip: You May Be Able to Qualify for a Real Estate Tax Exemption

Posted by Bobby Feisee

in Bobby's Blog

Did you know that seniors are eligible to reduce their real estate property tax bill if they meet certain state and local requirements? As part of the estate planning process, proper counseling should also include taking full advantage of tax programs that are available to alleviate the tax on your estate while you are alive as well as after you die. For example, in Maryland, Virginia, and District of Columbia, there are programs allowing credits to be applied against your property tax bill, as long as the property taxes exceed a fixed percentage of your gross income. Basically, this places a limit on the amount of property taxes you must pay based upon your income. However, each state has specific requirements that must be met before you can access this tax exemption program. For example, in Maryland, you must meet the following four requirements: You must own, or have a...

14 May

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Simultaneous Death Provisions: The Law in the “DMV”

Posted by Bobby Feisee

in Bobby's Blog

In many estate plans, it is quite common for a husband to leave everything to his wife and kids. And, vice versa, a wife routinely decides to leave everything to her husband and kids. But what happens if both the husband and wife die simultaneously? Under the common law, if there was any evidence that one of the deceased individuals survived the other, even by a few seconds, then the estates would be distributed in that order. This led to many bitter inheritance battles in court. So, to address this problem, the Uniform Simultaneous Death Act was passed and applies to the “DMV” (i.e. District of Columbia, Maryland, and Virginia). The Act establishes that if two people die within 120 hours of one another, and there’s no will that expressly addresses this situation, each person is considered to have predeceased the other. This means an individual’s estate will pass down to...

26 April

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Dying Without a Will in Maryland, Virginia or D.C. – Understanding the Differences in the DMV

Posted by KarenLewis

in Bobby's Blog

There is an area known as the “DMV”, which is a nifty acronym for the District of Columbia, Maryland, and Virginia. People who reside in the DMV routinely travel between these states on a regular basis (D.C. isn’t technically a state, but for the purposes of this blog, we’ll just call it a state). Just because these states are neighbors, does not mean that they share the same laws when it comes to passing assets on to your loved ones if you die without a will. If you suddenly pass away and do not have a valid will, you have died “intestate”. Each state has laws on the books that establish an orderly process for what to do with your estate in this situation. Here are the relevant provisions for residents of the DMV region: DISTRICT OF COLUMBIA D.C.'s intestacy law will pass your assets to your closest relatives. A court will...