What is the “Death Tax”? How Many People Actually Need to Worry About It?

What is the death tax and how many people actually need to worry about that?

Death taxes are a catchall term for taxes associated with someone’s passing, and generally, people are talking about either estate tax or inheritance tax.

And I will skip to the punch with Georgia residents, we don’t have inheritance tax, we don’t have a estate tax, but federally, there is a estate tax and estate tax is when the person’s estate is over a certain amount, or if it is over a certain amount with gifts that were given during lifetime added in.

So essentially, the federal government says, you know, you’re allowed to pass on X amount of money before we start taxing it. And right now, that amount is over 13 million per person, so it’s almost 27 million for a couple that we could pass along before any taxes, estate taxes federally kick in. In about a year, that is slated to go down to about 7 million per person, so 14 million per couple before federal estate taxes are kicking in.

Sitting here before the sunset of the estate tax exemption from that over 13 million down to a pitiful 7 million per person, that might not happen and so the number might continue to be larger, but what you need to do is look at what is the current estate tax exemption and consider whether that’s a number that your estate is likely to exceed.

So that’s how you look and decide whether you personally need to be concerned about death taxes, and a little tidbit on what exactly death taxes are.

If you’re in a situation where you need to do some planning around this or are concerned about this, please give me a call.