Orange County California

Trust Attorneys


How can I tell if my estate will have to pay federal estate tax when I die? For people who have size able estates, a federal estate tax may be due upon their death. As of 2015, the tax rate that is imposed on these estates is 40%. This can result in a significant tax bill for the estate if there is not proper planning. As you create your estate plan, it is important to determine whether your estate is potentially taxable.

5 Steps for Determining If You Have a Taxable Estate

Assessing whether or not your estate is potentially taxable for federal estate tax purposes is no easy tax unless you have significant experience in this field. The following are five steps to get started:

  1. Contact an experienced attorney for guidance in calculating and evaluating the size of your estate.
  2. Review all of your assets and their approximate value.
  3. Review any lifetime gifts that you have made.
  4. Determine whether these amounts exceed $5.43 million, the current exemption amount for 2015.
  5. Consider who receives your assets when you die. Generally, if your estate is small or moderately sized, no estate tax is incurred when you die. If your estate is larger than the annual exemption amount, tax may be due from the estate depending on who your beneficiaries are. Assets that pass to your spouse are typically not subject to estate tax when you die. However, it is important to note that this is a deferral and not an avoidance of tax. When your spouse dies, the entire value of his or her estate, which includes what was received at your death, is used for calculating whether an estate tax is due. If assets are left to tax-exempt charities, the value of those assets is typically exempt from estate tax.

How can I tell if my estate will have to pay federal estate tax when I die? Interested in learning more about estate planning and administration? We encourage you to sign up to receive our free newsletters today.

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