Estate taxes and whether they’ll affect you

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On Behalf of: Hatley Law Group, APC | POSTED ON: November 8, 2021
It’s true that estate taxes aren’t likely to be detrimental and in most cases are never levied. Some estate owners, however, have special assets that need special protection. In California, all asset classes within your estate are taxable based on the criteria you meet.

It’s true that estate taxes aren’t likely to be detrimental and in most cases are never levied. Some estate owners, however, have special assets that need special protection. In California, all asset classes within your estate are taxable based on the criteria you meet. In most cases, tax is avoided if not reduced, failing to truly impact your wealth. To better understand how estate taxes are managed, consider the examples below.

Exposure

Those with estates valued over $11.7 million must file a federal estate tax return. This is the core exposure your estate has and how its tax is issued. The tax you pay with this exposure is placed on any value from assets over $11.7 million. If your estate was worth this much upon inception, then the gains it incurs are taxable. In an estate review, however, you can avoid a capital gains tax by using “fair market values.”

Protection

Asset protection is relatively straightforward in regard to protection against taxes. For starters, you need a high net worth to reach the first tax bracket. Secondly, depending on the asset and who the beneficiary is, most of the protection you need is now written into basic laws. For example, what’s to be left to a spouse isn’t taxed. The “unlimited marital deduction” gives spouses the right to give any amount to the other.

A deal for California residents

If now is the first time that you’re estate planning, then consider the advantage of being a resident of California. California doesn’t apply estate taxes as a rule of thumb. You only need state residency and an attorney qualified to work here.

In moving forward, keep in mind that the state lets you deduct assets from your taxable estate. You can deduct donations, debts, and inheritances from your total taxable amount.

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12636 High Bluff Dr., Ste. 400
San Diego, CA 92130-2071

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