Above everything else, the first role of an executor in a Raleigh estate is to ensure the full payment of the decedent’s debts. This can include credit card bills, medical debts, and even tax liabilities.
However, in certain situations, the mere fact that a death has occurred can result in the creation of a new debt. Many states and the federal government levy an estate tax upon a person’s death. This creates a new tax liability that the estate’s executor must pay before distributing assets to beneficiaries.
Fortunately, a combination of state and federal laws ensures that few estates will need to pay this an estate tax in Raleigh probate cases. If you have questions about how this could impact the distribution of your assets, a knowledgeable attorney can clarify the relevant state and federal laws and determine if an executor needs to pay these taxes before distributing your assets.
Traditionally, many states in the country take a portion of a person’s estate after death. This estate tax has always been controversial and has been the target of many political groups over the past few years. Fortunately for Raleigh’s residents, South Carolina government decided to repeal the estate tax in 2013.
This ex-post-facto law applied to all deaths that occurred on or after January 1, 2013. This means that any person currently crafting an estate plan does not need to worry about the state taking a cut of their assets upon death. Additionally, executors currently performing their duties will be unlikely to have to pay any funds to the state in the form of an estate tax. An attorney in Raleigh can provide more information about this repeal and put people’s minds to ease concerning the payment of a state estate tax.
Just as many states still demand a portion of an estate’s value after death, the federal government has not hesitated to collect its due. However, many of the same momenta that led to the abolition of the state estate tax has severely hampered the federal estate tax.
The Internal Revenue Service will take notice of the value of an estate after a person’s death, this includes all cash, real estate, personal assets, and financial holdings on an estate. Based off this value, the federal government will determine whether an estate tax applies.
Notably, few estates will need to pay a federal estate tax. For deaths occurring in 2020, only estates with a value of at least $11,580,000 will need to provide payment to the federal government. In 2021, this benchmark will rise to $11,700,000. The amount of this payment will vary from 18 to 40 percent of the estate’s value. As a rule, the percentage will rise as the value of the estate climbs. An attorney in Raleigh can help to determine if the executor of an estate must make these payments and in what amount.
The sway of public opinion has led to the downfall of the estate tax as the concept of paying money to the government because of a death has fallen out of favor at both the state and federal level.
As a result, most executors and testators need not concern themselves with the concept of an estate tax. However, our experienced attorneys can provide you with more information if you have further questions about estate tax in Raleigh probate cases. Give us a call today to learn more.