A person’s right to transfer property to another person is important, but doing this in the past would often subject the assets protected in an estate to taxes. While Missouri law no longer imposes this tax, estates of a certain value may still need to pay money to the federal government. This could result in a significant reduction in the value of an estate or inheritance.
Understanding the role of the estate tax in St. Charles County probate cases is essential. Recognizing the impact of the estate tax could help parties prepare for future tax burden and minimize unnecessary liability. A knowledgeable probate lawyer could help with keeping these obligations in mind.
How Did the Estate Tax Work in the Past?
In short, the state government established laws in the past that allowed the state to levy a tax as a percentage of an estate’s value. This tax was applied whenever an estate moved into the probate process and often resulted in a significant reduction in an estate’s value.
Thankfully, there is no longer any state estate tax that applies to probate cases in St. Charles County. This means that local residents are free to plan their estate without having to worry about state tax burdens that might diminish the value of their assets.
Federal Estate Taxes and Trusts
While the state will never seize a portion of a St. Charles County resident’s estate, the federal government is a different matter. Despite the concept of an estate tax being a highly politicized issue, the IRS still levies a tax on estates of a certain value.
Currently the Internal Revenue Service will tax a percentage of any estate with a value of at least $12,060,000. This comprises a surprisingly large number of estates. For instance, many estates get a significant portion of their worth from life insurance policies or property value. If an individual wants to avoid this federal tax, they might need to engage in some creative estate planning.
One option to address estate tax issues, is to place property into a trust. If an individual has questions about how which estate planning strategies could help avoid or minimize the estate tax, a conversation with a knowledgeable lawyer in St. Charles County could be crucial.
Reach Out to Our Attorneys about the Estate Tax in St. Charles County Probate Cases
Concluding whether an estate in St. Charles County will be subject to taxation requires thoroughly determining the value of the assets in the estate. While St. Charles County residents are no longer subject to a state-levied estate tax, the federal government retains this means of gathering funds. Estates that carry a value of at least $12,060,000 will need to pay a portion to the IRS.
Limiting the value of an estate is one way to avoid the payment of these taxes. A popular way to achieve this goal is to place property into a trust. This step means that the property is no longer an asset of a trust maker. This property is also not subject to the probate process. If you have further questions about the purpose of the estate tax in St. Charles County probate cases or how to best handle this roadblock, reach out to our legal team today to schedule your initial consultation.