A Quick, Simpler Prime about Georgia Inheritance Tax.
Understanding Georgia inheritance tax laws and rules can be overwhelming. Whether you’re an executor newly in charge of handling a complex estate left by a business owner, or you’re a family member concerned about losing an unnecessary amount of your inheritance to Georgia and federal estate taxes, you probably have many questions about what to do.
Under federal tax law, estates with fewer than approximately $5 million in assets are not subject to estate taxes. Georgia law is similar to federal law. Due to the high limit, many estates are exempt from estate taxes. Before assuming that an estate is exempt, it is critically important to analyze the estate because many assets, such as life insurance, are commonly overlooked when determining whether an estate must file an estate tax return.
Determining the Value of an Estate
It often takes a long time to calculate the exact value of an estate. The dollar amount depends on various factors, including:
• The current value of all property and assets, including businesses, bank accounts, and insurance policies;
• Deductions for certain allowed expenses;
• Other mandatory adjustments, such as for lifetime gifts.
To protect the estate, the personal representative may need to file an estate tax return, even if he or she believes that the property will not cross the taxable threshold. In addition, there are sometimes circumstances when an estate tax return should be filed to protect other family members, such as a surviving spouse.
When to File the Return
• After an individual has died, the executor or administrator has nine months to file an estate tax return. If the deadline is missed, it can cause additional harm to the estate, heirs, and beneficiaries. For that reason, it is very important to make sure the estate tax return is filed accurately and on time.
Other Estate Tax Considerations
Your loved one may have planned ahead to avoid an excessive estate tax burden using one of the many methods available. A few of the most common methods, but certainly not all of them, are below:
• Marital deductions. Spouses may receive gifts or bequests as part of a will, free from any estate or gift taxes.
• A/B Trusts or Credit Shelters. When a married couple possesses an estate exceeding the estate tax-exempt amount, they may set up one of these trusts to protect the surviving spouse from estate taxes in the event of the other’s death.
• Irrevocable Life Insurance Trust. Unbeknownst to many people, life insurance proceeds count when calculating the amount of estate taxes due. As a result, sometimes large portions of life insurance policies can end up being used to satisfy estate tax liability. However, an irrevocable life insurance trust separates these benefits from the estate and can shield them from being counted when determining the estate’s tax liability.
Assistance for Complicated Estate Tax Matters
Although we have attempted to provide a brief introduction to estate taxes, this is by no means anywhere close to a complete description. Estate tax matters are very, very complicated and we strongly recommend that if you have an estate that could potential have an estate tax issue, you retain the services of a qualified probate law firm to assist you.
To protect your loved one’s legacy, contact Georgia Probate Law Group today. We can make the process simple and straightforward, so you can concentrate on taking care of yourself and your family.