Massachusetts taxpayers know that the federal government raised tax rates for personal and investment incomes for wealthy individuals effective for 2013 tax returns. The tax changes were in part implemented to fund the President's health care plan. While this hike in income tax rates will only affect individuals making more than $400,000, the new marginal rate will affect trusts making more than $11,950 a year. This change in tax law may create challenges for estate planners.
In an action that affects Massachusetts residents and citizens all across the country, Congress passed the American Tax Relief Act of 2012. Included in that law are provisions for transfer taxes or taxes on an estate.
In the first part of this post, we noted how easy it can be to overlook even the most basic estate planning steps. Even for a lawyer, such as the character of Matthew Crawley on "Downton Abbey," getting a proper will in place proved to be not at all straightforward.
In the first part of this post on the basics of estate planning, we focused on the documents that people should put in place to provide structure and guidance for health care decisions. That guidance and structure is crucial in situations when someone is no longer able to make those decisions for themselves due to cognitive or other impairments.
Taw laws are constantly changing. It's a classic example of the old adage that "the only constant is change."
Massachusetts is one of the states that ed the way on the recognition of same-sex marriage. Several more states have followed in the last couple of years. And now, for purposes of federal tax returns, the rest of the country has followed as well.
It sounds like a bad estate planning dream. Is it really possible that the IRS would try to collect estate tax from a beneficiary more than a decade after the death of a parent who was trying to pass his estate along to his children?