You may be concerned about the federal estate tax when you are planning your estate. The first piece of good news that we will share is that the estate tax is not applicable on asset transfers between spouses. If you are legally married in the eyes of the law, you can transfer unlimited assets to your spouse tax-free.
We should point out the fact that there is a federal gift tax along with the federal estate tax, and the two taxes are unified. The exclusion is a unified exclusion that applies to taxable gifts that you give while you are living along with your estate. The unlimited marital deduction also extends to lifetime gift giving.
To use the unlimited marital transfer tax deduction, your spouse must be a citizen of the United States. The unlimited marital deduction is not available to non-citizens, because a citizen of another country could return to his or her country of citizenship with a tax-free inheritance, and the IRS would never be in a position to collect the death tax.
The fact that the powers-that-be do not extend the estate tax exclusion to non-citizens is instructive to citizens. If you are exposed to the estate tax and you leave everything to your spouse tax-free, what would happen next? Your spouse would be in possession of an estate that is taxable. The taxman would still be poised to get his share.
For this reason, tax efficiency strategies are called for, even though you can leave everything to your spouse tax-free if you choose to do so. There are various different courses to take, and the ideal strategy will vary depending on the circumstances.
Free Estate Tax Report
We have used this blog post to answer a single question about the federal estate tax. If you would like to obtain more comprehensive information, download our in-depth report on the subject. This report has been carefully prepared, and it will provide you with a great deal of useful information about the death tax.
To get your copy of the report, which is free, visit this page and follow the simple instructions: Report on Federal Estate Tax.
Schedule a Consultation
You have to act in a careful and informed manner if the value of your estate exceeds the amount of the estate tax exclusion. Our firm offers free consultations, and we would be glad to assist you if you have concerns.
At the consultation we will gain an understanding of your unique personal situation. We will listen as you explain your objectives, and we will ultimately explain your options to you and make the appropriate recommendations.
To set up an appointment, send us a message through this page: Southampton PA Estate Planning Attorneys.
To learn more, please download our free Pennsylvania Estate Tax here.
Joe Masiuk, Estate Planning Attorney
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