Here we define death taxes as taxes imposed by the federal and some state governments on someone’s estate or inheritance upon their death. For most people, the death tax does not effect them as the value of their inheritance is below the set $11.7 million however, presently beneficiaries are still required to file taxes on behalf of the deceased’s income and property. If the deceased leaves the beneficiary with the contents of a retirement account like a 401(k) or an IRA and the beneficiary makes a withdrawal from that account, the beneficiary is liable to taxation. Similarly, if a life insurance policy is paid out in installments, the beneficiary is liable to taxation. If the deceased leaves a beneficiary with a valuable item that is then sold for a value higher than the original value at the time of death, the beneficiary is liable to capital gains taxes. Another tax is the fiduciary tax which holds the beneficiary liable to any income earned from the moment of death until the administration of the estate. The fiduciary tax most often effects the earnings of any investment account of the deceased.
In some of these situations, these taxes are avoidable if managed shrewdly ahead of time with the help of a lawyer. Thus, people who are most likely to be liable to the death taxes as defined above are those beneficiaries who have encountered a sudden and unexpected death and/or low income beneficiaries who haven’t the resources to secure legal help. Therefore, we propose that beneficiaries should not have to pay any of the above taxes.
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Can’t you can do this yourself using LLC’s.
Put the inheritance in an LLC with all parties interested as officers of the LLC.
Then, there’s Joint Tennants with Right of Survivorship (JTWROS)…
“In some of these situations, these taxes are avoidable if managed shrewdly ahead of time with the help of a lawyer (as you’re suggesting with an LLC etc) . Thus, people who are most likely to be liable to the death taxes as defined above are those beneficiaries who have encountered a sudden and unexpected death and/or low income beneficiaries who haven’t the resources to secure legal help.”