Estate taxes

[Anonymous]

Did you have to pay estate taxes when your parents died? Just wondering how many inherited at this level. It’s looking like my siblings and I will have to pay millions when parent passes in the near future. Overall I am very lucky financially (except to lose my parent) but the federal tax amount is way more than I made in my entire life working. Parent never really shared info before. I can’t really ask friends.

[Anonymous]

Anonymous wrote:Did you have to pay estate taxes when your parents died? Just wondering how many inherited at this level. It’s looking like my siblings and I will have to pay millions when parent passes in the near future. Overall I am very lucky financially (except to lose my parent) but the federal tax amount is way more than I made in my entire life working. Parent never really shared info before. I can’t really ask friends.

Yes but very little. Fortunately my parents had some great estate attorneys set up the right kind of trusts for their wealth. The result is very little estate taxes.

[Anonymous]

That sucks if they didn’t do estate planning. State estate taxes can have a very low exemption rate so they might owe the state. A marital deduction trust is standard with assets over a certain amount. Parents with a taxable estate should be passing it down to the next generations by way of gifts, education, whatever.

And you don’t pay taxes your parent's estate does.

[Anonymous]

In general, this is why parents decide to give monetary gifts to their children and grandchildren. This reduces the amount of the estate overall.

My spouse's grandparents did this to get below the amount for their state. Each state has different laws.

[Anonymous]

Anonymous wrote:In general, this is why parents decide to give monetary gifts to their children and grandchildren. This reduces the amount of the estate overall.

My spouse's grandparents did this to get below the amount for their state. Each state has different laws.

This!

Some states have very low estate tax thresholds (especially some without normal income taxes---they have to get $$$ somewhere). So estate tax planning is essential if you are in that range. That is what trusts and good estate planning are for

[Anonymous]

Anonymous wrote:That sucks if they didn’t do estate planning. State estate taxes can have a very low exemption rate so they might owe the state. A marital deduction trust is standard with assets over a certain amount. Parents with a taxable estate should be passing it down to the next generations by way of gifts, education, whatever.

And you don’t pay taxes your parent's estate does.

OP here, yes it would be taken from the estate, but the tax comes off the top before being divided by heirs. Parent has a trust but that doesn’t change the amount owed to the IRS. Prior gifts had to be declared and offsets the exemption (they gave me a couple hundred thousand 30 years ago and apparently filed a form on it with the IRS and apparently the IRS still would remember this). I’ve consulted with their estate attorney on it. Yes they should have given a bunch to the grand kids and bought me a house, private island or whatever, but didn’t.