Inheriting money or property can be a joyous occasion and a pleasant surprise. However, one’s elation can quickly turn sour after realizing that the government may want a share.
Taxes vary from state to state, so Georgia residents cannot rely on information from nearby areas for accurate details about estate and inheritance taxes. Up-to-date information is essential for executors and anyone receiving a large sum of funds.
Evaluating an estate
The first factor to consider is the total assets that compose an estate. Sometimes an individual overlooks nonmonetary items. These underestimated possessions might include valuable antiques, collectibles, family heirlooms and art. Even intellectual property like patents, licenses and copyrights may affect the calculation of an estate’s worth.
Individuals may undervalue their estates upon entering probate without understanding how to calculate and manage each element appropriately. One notable consideration is a life insurance policy that pays upon death. Depending on how a person sets up a trust affects whether a payout goes toward tax liabilities.
Understanding inheritance tax in Georgia
Federal laws only assess taxes on estates that reach a specific threshold, but the amount changes when tax brackets adjust. Liabilities also depend on if the recipient is single or filing jointly with a mate. Additionally, future administrations and sessions of Congress could change the amount of the estate-tax exclusion.
Fortunately, Georgia levies no inheritance or estate tax. However, laws can change, so anyone who receives an inheritance needs to check the latest additions to the tax code. A more critical concern may be how creditors’ claims against an estate can affect the situation.
Knowing the laws that apply to an estate can prevent later complications. By crafting a wise financial plan, an inheritance will not become an unexpected burden.