Navigating estate and inheritance taxes

Estate planning requires a clear understanding of both federal and state tax implications in 2024. These taxes can significantly impact how your assets are distributed to loved ones.

Federal Estate Tax:

• Good News: The federal estate tax exemption for 2024 is a generous $13.61 million for individuals and $27.22 million for married couples filing jointly. This means estates below these thresholds won't owe federal estate tax.
• Filing Requirements: If your estate exceeds the exemption, a federal estate tax return must be filed within nine months of your passing. Assets exceeding the limit are taxed at a rate of 40%.
• Exemption Update: While there's uncertainty about future changes, the current high exemption is likely to remain in place for the next few years due to temporary legislation. Consulting a tax professional for the latest updates is always recommended.

State Taxes:

• Be Aware of State Variations: Some states have their own inheritance and estate taxes with varying rates and exemption thresholds. These can significantly impact your overall tax burden.
• Not an Exhaustive List: While some states like Connecticut, Hawaii, and Illinois have estate or inheritance taxes, this isn't a complete list.
• Stay Informed: To ensure you have the most recent information specific to your state, check your state's Department of Revenue website or consult with a tax professional.

Planning for the Future:

Estate and inheritance tax laws can be complex and change over time. By working with a qualified estate planning professional, you can create a plan that minimizes your tax burden and ensures your wishes are carried out smoothly for your beneficiaries.

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