The loss of a loved one comes with many life changes and tasks that must be completed. You will need to notify family members; your routines will adjust without their presence; and the funeral must be planned—and this is only a fraction of your responsibilities. If you are the executor or administrator of their estate or trustee of their trust, your responsibilities will significantly increase. Failure to handle them correctly can cause severe legal penalties in Huntington Beach, CA. Choosing to hire an experienced estate attorney and getting their assistance will help alleviate some of the work you must do and give you more time to grieve.
Failing to meet the requirements of the estate or trust can cause legal problems that will make it harder to process your loss. This is especially true for any taxes related to the estate or trust, as the IRS can administer severe penalties. At Kevin Rice, Attorneys at Law, we understand the deep pain you are going through while recovering from your loss, and we want to help. We have represented countless clients by handling an estate or trust after their loved one has passed, as we believe no one should need to deal with the extra stress during this difficult time. Our experienced team can correctly prepare and file any estate or trust tax filing requirements.
Following a person’s death, their estate will typically be handled through a probate process. This process is typically broken down into six main steps:
Some people choose to create a trust and put all their property in that trust before passing. Trusts can bypass the probate process, so the court system is less involved. However, both an estate administrator and a trustee must ensure that any debts and owed taxes are settled before the assets are distributed to the beneficiaries. Failure to pay the appropriate taxes can result in a complicated investigation by the IRS, made even more difficult by the grief you are dealing with each day.
An estate tax, otherwise referred to as a “death tax,” is a tax that is applied to a decedent’s estate. It must be paid prior to the estate being disbursed to the designated heirs. An estate tax is different from an inheritance tax, which is paid after it has been disbursed by the person who inherited or received it.
California is one of 38 US states that does not levy an estate tax on an estate, regardless of its size. However, the lack of an estate tax does not mean that there are no other applicable estate taxes. There is a federal estate tax that applies to estates worth more than a predetermined exemption value for that year. For estates that are worth more than this value, the tax rate ranges from 18% to 40%, depending on how much the estate’s value exceeds the predetermined amount. The taxable value of the estate is only the value that exceeds the exemption rate. For example, in 2022, the exemption rate was $12.06 million. If an estate is worth $12.48 million, the taxable estate value is $420,000. The top tax rate for this taxable value is 34%, but only a portion of this total value will be taxed at this rate; there is an increasing bracket for different threshold levels above the exemption rate.
A tax attorney is a lawyer who has completed law school and passed the California bar exam but has chosen to specialize in tax issues. They are primarily trained in techniques to structure assets in such a way as to reduce tax liability. They can also represent clients in tax-related litigation. While working with a tax attorney, the information that you provide is confidential, and they cannot be forced to testify against you.
A certified public accountant (CPA) is someone who is educated in the various accounting fields. In the financial planning profession, they are considered one of the most versatile and trusted. They are the best option for tax preparation and year-round financial record keeping, as well as ensuring IRS compliance. One of their most beneficial services is the ability to audit or review financial records. This allows them to identify areas where you are in good standing and problem areas that need improvement.
Both tax attorneys and CPAs are experts in their fields, but utilizing someone with dual certifications can reduce costs, lower the chances of anything being missed, and speed up the return time by finding a single person to handle the jobs of two. A tax attorney who is also a CPA has the financial background to understand the intricate details associated with estate or trust laws and regulations, as well as the knowledge to help you avoid any issues with the IRS. If any problems arise, they will also be able to effectively represent you because they already understand your exact situation.
Handling tax information is stressful, even without considering the confusion and heartache that come with losing a loved one. Since 1994, Kevin Rice, Attorneys at Law, has taken care of California residents by preparing and filing various estate-related taxes. A skilled Huntington Beach estate tax attorney can grant you peace of mind and protection from the IRS while you work to process your loved one’s passing. We can ensure the best possible experience through this complicated process. Contact us today for a consultation so we can work together to correctly close out the estate or trust of your loved one.
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