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Palm Springs Attorneys
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Palm Springs Attorneys
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Wills and Trusts – Free Legal Resources
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Wills & Probate Lawyers
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Palm Springs Estate Taxes
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Palm Springs Probate Law |
| Probate is the legal process of settling the estate of a deceased person, specifically resolving all claims and distributing the decedent's property. |
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Palm Springs Probate
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Palm Springs Estate Planning |
| Traditional Estate Planning means preparing for the orderly and efficient transfer of assets after death. Estate Planning involves planning for the accumulation and distribution of an estate during lifetime as well as at death. |
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Palm Springs Power of Attorney |
| A power of attorney (POA) is an authorization to act on someone else's behalf in either a legal or business matter. Decisions about personal/health care matters will remain in your hands unless for some reason you lose the ability to make such decisions and to communicate them. Your power of attorney does not begin until you are incapable of making those decisions for yourself and in fact may never begin. |
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Palm Springs Living Trust |
| A Living Trust is a revocable, inter-vivos or lifetime trust agreement, which is established and signed by you as the Settlor, as the Trustee, and as the Beneficiary. Living trusts are commonly used in place of wills, to avoid probate. |
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Palm Springs Will and Trust Lawyers |
In the common law, a will or testament is a document by which a person (the testator) regulates the rights of others over his or her property or family after death. In the strictest sense, "will" is a general term, while "testament" applies only to dispositions of personal property (this distinction is seldom observed). A will is also used as the instrument in a trust.
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Palm Springs Estate Taxes |
Are you seeking more information about Palm Springs Estate Tax, Palm Springs Estate Tax Lawyers or Palm Springs Estate Tax Attorneys? See below for more details.
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| Estate taxes are paid by your estate after your death. The tax is based upon the entire value of your estate, including your personal assets such as your home and investments. This is a very complex and changing area, and planning should be done with a qualified professional. Generally, if the total value of your assets, including business assets, exceeds $675,000, you could be subject to Federal estate tax. in 2001 the US Congress initiated a repeal process that will take until 2010 to complete. At that time, estate taxes will be automatically reinstated the following year unless Congress passes legislation making the repeal permanent. |
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| How To Avoid Federal Estate Taxes |
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Some of the most popular ways to avoid federal estate taxes are as follows:
Tax-free gifts. You can give up to $11,000 per calendar year per recipient without paying gift tax. You can also pay someone's tuition or medical bills, or give to a charity, without paying gift tax on the amount. This reduces the size of your estate and the eventual estate tax bill.
An AB trust, where spouses leave their property in trust for their children, but give the surviving spouse the right to use it for life. This keeps the second spouse's taxable estate half the size it would be if the property were left entirely to the surviving spouse.
A "QTIP" trust, which enables couples to postpone estate taxes until the second spouse dies.
Charitable trusts, which involve making a sizable gift to a tax-exempt charity.
Life insurance trusts, which let you take the value of life insurance proceeds out of your estate. |
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| Some States Do Impose Estate Taxes |
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| Even if your estate isn't big enough to owe federal estate tax, the state may still take a bite.
Until recently, most states didn't impose their own estate tax; instead, they took a share of the federal estate tax paid by large estates. (This is called a "pick-up" or "sop" tax.) But the federal legislation that started the phase-out of the federal estate tax also cut the share of estate tax that states get to keep. To get back some of what they are losing, some states are collecting tax from estates that aren't big enough to owe any federal tax. So far, almost half the states have changed their laws so that they can keep collecting estate tax.
Inheritance tax. Some other states impose a separate tax on a deceased person's property, called an inheritance tax. The tax rate depends on who inherits the property; usually, spouses and other close relatives will pay nothing or just a low rate. |
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| Tax Changes That Affect Estate Planning |
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The 2001 legislation affects all kinds of taxes, not just gift and estate taxes.
Generation-skipping tax. This is an extra federal tax on transfers made from older folks to someone in their grandchildren's generation. When the estate tax is repealed in 2010, the generation-skipping tax will also disappear. Until 2010, the exemption amount will be the same as the estate tax exemption amount.
Basis of inherited property. A change with far more widespread implications is the end of the "stepped-up basis" rule for inherited property. Under current law, when you inherit something, your tax basis (used to calculate taxable profit when you sell something) is the date-of-death market value of the property. So if the property's value has gone up significantly since the former owner acquired it, the basis is "stepped-up" to the date-of-death value. And that means you get a big tax break when you sell, because your taxable profit is based on the date-of-death value, not the lower basis of the former owner. 
That rule will end when the estate tax does, in 2010. From then on, anytime you inherit property, you can choose to take a stepped-up basis for $1.3 million of it. If you inherit more than that, you will have to choose which assets get a stepped-up basis. For the rest, your basis will be the former owner’s basis or the date-of-death market value, whichever is smaller. |
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| Unmarried Couples: Who Owns What? |
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Unless an unmarried couple -- gay, lesbian, or heterosexual, it makes no difference -- agrees to share ownership of specified property, each member of the couple owns only his or her own property. An agreement to own property together must often be in writing to be enforceable. In some states, an oral agreement is effective - if it can be proved, but that can often be difficult. In short, it is best for unmarried couples to put any property-sharing agreement in writing.
If you're part of an unmarried couple where each person has kept all property separate (a written agreement to do this, listing the property of each person, is a good idea here also), each of you is free to give your property to whomever you wish. However, if property ownership is shared, either under the terms of a written contract or in a tenancy in common, you're free to dispose of your share only, unless the contract or partnership agreement provides otherwise.
Property held by unmarried couples in joint tenancy goes to the survivor automatically. |
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