Few people actually have to face an estate tax, but for those who have many assets, the question of how the estate tax could affect them remains. The estate tax is not the only tax that can affect an estate, to be clear. Gift taxes are sometimes ignored but can be substantial. State inheritance taxes are sometimes levied as well.
After your death, your debts must still be paid. Despite the fact that you're not there to pay them. Creditors may try to make your family members feel as if they have to pay these debts, even though they're not usually required to do so legally.
If you are left as an executor of an estate, your job is to administer the estate and make sure the distribution of assets goes smoothly. This is not always an easy job. You have many things you have to do before you can divide out property to the heirs of the estate.
When people typically think about the time after a loved one's passing, they know it can be difficult emotionally. That should be your first focus. However, there are also many complex financial realities that have to be addressed at some point, including the paying of taxes. It is important to know how this process works. Here are three common questions that people have:
When you were younger, you always had big ideas. Throughout your life you've worked several jobs and dreamed of starting your own business. After some schooling, innovative thinking and hard work, you are ready to start your new adventure.
Ohio residents may think of debilitating medical conditions like Alzheimer's disease when the issue of incapacity is raised, but car accidents or other unforeseen events can leave even younger individuals who enjoy good health unable to care for themselves or make important decisions. While becoming incapacitated may be difficult to talk or even think about for most people, taking steps to prepare for the worst possible outcomes in life could help to make things easier for friends and family members during extremely difficult times.
Ohio residents with estate plans should have an understanding of probate. It is a legal process that can validate the last will and testament left by a decedent. If the deceased has no will, his or her estate will have to go through the probate process.
When a spouse dies, the surviving individual is not automatically liable for his or her remaining debts. Generally, an Ohio resident is only liable for a spouse's debt if it was jointly held or if there was some sort of guarantee made on the balance. However, a surviving spouse may be indirectly liable for a debt because creditors could seize any assets that were supposed to transfer to that person. The living spouse would then receive a portion of that inheritance or nothing at all depending on what was owed.
Some people who have been named as executors of an estate in Ohio might wonder what will be involved in the process. The first step for an executor is to get copies of the death certificate. This will be necessary to notify various agencies, organizations and businesses such as the Social Security administration, life insurance companies, banks and more of the person's death. It is also necessary to locate the will or the trust although the executor or the attorney who prepared them might already know where they are.
Ohio residents may be aware that the unused portion of a deceased individual's federal estate tax exemption can be used by their surviving spouse, but they may not be aware that the strict paperwork required to obtain an extension for what is known as a portability election has led to the Internal Revenue Service being inundated with requests from executors. This soon developed into a major problem for the cash-strapped federal agency, and it announced in June that it would be addressing the issue by temporarily softening the rules dealing with portability election extensions.