Family Issues

The IRS expects estate taxes to be paid within nine months after the date of decedent's death unless one exception applies.
The exception involves a decedent who owned a business that accounted for more than 35% of the total estate. In that instance, a formula established by the IRS may allow estate taxes to be paid over several years. Speak to your local CPA about filing Form 706.

The task of valuing your estate will be left to the executor of your will.
If you formed a living trust, the duties will be performed by the trustee. The executor or trustee might have to call in certain appraiser professionals for help.
A real estate broker or appraiser might be used to value your home.
The Internal Revenue Service requires that all estates be valued at the time of a taxpayer's death in order to determine whether any estate taxes are due.

The first step in determining the value of your estate is to add up the value of everything you own and then subtract it from the estate value, the expenses of settling the estate and making any non-taxable bequests. No federal estate taxes are assessed on estates valued at less than $5 million.
Included in your estate is your home and any rental property you may own, securities and other investments, retirement funds (401k, IRA's)you have saved and all your personal possessions.
Pending federal and state income tax refunds are also included. Many such items will automatically pass to your spouse and not be included in your estate if the property is jointly owned.
In addition, the size of your estate will be reduced by the money you owe, such as a mortgage on your home, burial expenses, the cost of settling the estate and other items.
Assets left to charity will also reduce the size of your estate.

Estate taxes can take a big bite out of what you would like to leave your heirs. Federal Estate taxes apply only to estates larger than $5,250,000 for the years 2013.
There are several strategies you can pursue to reduce or eliminate the tax bite. Speak to your local CPA or attorney about these strategies.
They may mention to you to consider making gifts. You can give up to $14,000 a year to as many people as you like, tax free. Together with your spouse, you can give up to $28,000 to each person. Also consider giving your life insurance policy to your wife, your child or put it in an irrevocable trust provided the assignment takes place more than 3 years before death. To keep the policy out of your estate, you cannot continue to pay the premiums.
The new owner has to pay them. Another strategy is to get married. No estate tax is levied on property given to a spouse. Of course, whatever is left (over $5,250,000) will be taxed in your spouse's estate when he or she dies.

Estate taxes are taxes based on the value of the estate you leave when you die. Estates valued at more than $5 million are subject to the federal estate tax. Some states use lower limits and other states charge no estate taxes at all. Any estate taxes that are due are usually paid for by the estate itself. This is different from inheritance taxes. They are state taxes that your heirs may be required to pay on the property they inherit.

One strategy to avoid Probate is through the use of a "Living" or Inter-vivos Revocable Trust. During the lifetimes of the individuals a Trust is created, husband and wife are both the Trustees of the Trust, so they have complete control of it. The Trust is amendable and can be changed at any time by the individuals who created it. When one or both individuals die there is no Probate, provided the individuals took the time while they were living to transfer all of their assets into their Trust. This entails the retitling of assets such as bank accounts, real estate, and stock brokerage accounts into the name of the trust. During their lifetimes, these individuals name who they want to be their trust's successor trustee. The successor trustee could be a family member, friend, an advisor or bank. When death occurs, the surviving spouse typically takes over as the successor trustee and manages the assets. Then when the surviving spouse dies, the successor trustee named in the trust takes over and distributes the assets according to the terms the individuals stated in their trust. There are also other strategies available. Speak to your local CPA or attorney for more details.

Probate is a proceeding in State Court after a person dies.
The purpose of Probate is to transfer title to property from the decedent to his or her heirs and to settle any debt liabilities owed by the decedent at the time of death.
Probate is completely avoidable, as long as the avoidance is done before death.
Generally, Probate is very expensive, with costs of approximately $3,500 for every $100,000 of gross estate. Generally, Probate takes a long time. It takes at least 6 months and frequently 1 to 2 years or more. If the decedent had a Will, the contents of the Will are a public record and anyone can go to the courthouse and find out who is going to get what distribution amount.
Speak to your local CPA or attorney for more information.

For the year 2013, 5,250,000 Million. State tax thresholds vary per state

Congress has joined the Gift Tax and the Estate Tax together.
If you give more than $14,000 to any person per year ($28,000 with your spouse), you will be subject to the Gift Tax.
If your gift to any person is in excess of $14,000 ($28,000 for married individuals) then you will have to file a Gift Tax return which is generally due April 15 of the year following the gift.
The amount of the gift in excess of $14,000 ($28,000 for married persons) will reduce your lifetime exemption for Estate Taxes by the amount of the excess.