As the old saying goes, death and taxes are two things everyone can count on. When those two things combine, they have the makings of a nightmare. California does not have an estate or inheritance tax, but every state is subject to the federal estate tax, or “death tax.” People who have assets above the exemption amount may consider estate planning if they are concerned about how this tax will affect their loved ones.
A man in another state owns a considerable piece of land which he farms. His desire is to pass the farm on to his children after he dies, but he fears they will end up selling the land just to pay the estate taxes. The federal tax of up to 40 percent currently applies to any inheritance over $5.45 million or $10.9 million for married couples.
The farmer and a group of other business owners are lobbying for the repeal of the estate tax, saying it places a financial burden on heirs at a time when they may be least able to pay it. Some feel it weakens the idea of the American dream to heavily tax the fruits of a lifetime of labor. Those who defend the estate tax say it is necessary to maintain equity in wealth, which will help small businesses in the long run.
The estate tax has been instituted at various times in history, often to fund military operations. While at other times the tax was repealed, the last tax — levied 100 years ago — has never been repealed. People in California who fear that this tax will burden their loved ones may visit an attorney to discuss their estate planning options, such as trusts and transfers. Having a plan in place may allow one’s family to enjoy their inheritance more fully.
Source: urbannewsservice.com, “Black farmer fights to kill death tax“, Avis Thomas Lester, June 7, 2016