Individuals often wonder how taxes will affect their estate planning and the ability of their heirs to inherit property. Fortunately, Kansas is one of many states that does not levy an estate tax on residents. However, it is important to understand how taxes in other locations, as well as the federal estate tax, may still apply.
An attorney could help you to better understand the estate tax in Manhattan probate cases. A probate attorney’s comprehensive knowledge of the relevant tax codes could help provide the best chance for your heirs and beneficiaries to receive the maximum value of the assets to which they are entitled.
There is No State Estate Tax in Manhattan
There is no current law in place that imposes a state estate tax in Manhattan. This means that as long as a person was living somewhere in the state at the time of their death, the estate will not need to pay any taxes to the State.
Even so, other state laws may still impact an estate. Some states and foreign countries have enacted inheritance taxes. If an heir is a resident or citizen of such a jurisdiction, they may need to surrender a portion of their inheritance. An attorney well-versed in Manhattan estate tax laws could help to determine if this may be the case.
The Federal Estate Tax
A lack of a state estate tax does not mean that all estates in Manhattan are free from taxation. The federal estate tax still applies, as it does to every estate in the nation. Even so, this will only impact a small percentage of estates in Manhattan.
As of 2021, the federal government will only claim a portion of an estate that has a value in excess of $11,700,000. If an estate crosses this threshold, the executor must pay a percentage of the estate’s value in excess of this threshold as an estate tax. This may range in value from 18 percent to as much as 40 percent of this excess value. A Manhattan attorney could explain in more detail how federal estate tax may impact a probate case.
Crafting Estate Plans to Limit Tax Liability
For parties who believe that their estate may be subject to taxation, there are steps that they can take to limit the impact of these laws. Perhaps the most prominent is crafting an estate plan in a way that limits its value once it goes to probate.
Placing assets into a trust that distributes assets upon death is a popular way to achieve this goal. These trusts can function in much the same way as a will while lowering the taxable value of an estate. An attorney experienced in probate cases could help an individual draft their estate plan in a way that limits the impact of estate taxes.
The Estate Tax in Manhattan Probate Cases is an Important Factor
For most individuals in Manhattan, taxes generally have a limited impact on estate plans. Still, the federal estate tax does apply to estates with a value in excess of $11,700,000. In addition, other states’ taxes may seize a portion of an heir’s inheritance.
The estate tax in Manhattan probate cases is an important factor to be aware of when planning for your future. An attorney could provide more information about the relevant laws as well as formulate strategies to limit the impact of any potential taxation. Call today to learn more about what a skilled legal professional could do for you.