Sadly, your parents have died after a long life well lived. You and your siblings have laughed and cried together over your memories and now it is time to deal with practical matters –the estate.
Mom and dad had worked hard and done well, enjoying the fruits of their labors –nice house, a snowbird home in Florida, maybe a boat. And they wanted all their children to enjoy the same things that they had –happy family memories in the holiday home maybe, or a shrewd art purchase when they were young that has become highly valuable. They died knowing the grandchildren would have a great start in life and maybe enjoy exactly the same memorable experiences in special family places.
But instead of the keys to the cabin, the lawyer hands you a bill –a tax bill. Because mom and dad had done well, the combined value of their assets and possessions mean estate tax is due. And the tax authorities collecting do not take title deeds to property –just cash.
Now if this applies to you, the good news is you are not poor – the value of the estate has to be high to be subject to estate tax, sometimes called inheritance tax or by those who disagree with it, the death tax. But the tax bill will have to be paid –and if there is not enough liquid cash in the estate when it is divided, assets will have to be sold to meet the bill. Or if you want to keep the actual possessions, you will have to come up with the money from somewhere. Difficult when dealing with sentimental items.
But here at EmVision Capital Advisors, our experienced advisors can help guide you to potential solutions. The situation is complicated and also alters by state, so you should also seek guidance from professional tax advisors.
Federally, estate tax is only a factor on large estates, valued at more than $11.2 million – but many states have their own versions of the tax which can kick in from estates worth as little as $1 million. Ohio does not have such a tax at this time, but who knows what the future may bring? One way of seeking to protect your children from the problems caused by an estate tax is to take out life insurance.
Talk with our professional advisors at EmVision Capital Advisors–and your tax advisor –to see about the best way to pre-plan for the expected amount of any inheritance tax likely on your estate. You will need to stay on top of this as time marches on –tax laws can change at any point in the future, as may the value of your estate – but by building a strong relationship with EmVision Capital Advisors we can help advise you throughout your life. We can help you plan to hope your children get to enjoy everything you want to leave for them – with no tax bill attached.
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