What happens when you inherit money?
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What happens when you inherit money?
The beneficiary pays inheritance tax, while estate tax is collected from the deceased’s estate. Assets may be subject to both estate and inheritance taxes, neither of the taxes or just one of them. In those states, inheritance can be taxed both before and after it’s distributed. Of course, state laws change regularly.
Which state has no estate tax?
Estate tax is based on your legal state of residence, not where you die. The states with this powerful tax combination of no state estate tax and no income tax are: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, and Wyoming.
What state has the highest estate tax?
Washington State’s
How do I avoid state estate tax?
The most common ways to limit state estate tax exposure are through the use of AB marital trust planning with a credit shelter trust or through lifetime gifting. Clients should keep in mind, however, that each of these techniques can result in the eventual loss of a step-up in cost basis.
