You Property: Your Choice

by Rebbeca Binder on November 8, 2013

  • Sumo
(U.S. Property Law and generally) Most people work hard for their entire lives to make sure that their family has everything that they need if a tragic accident or illness were to rip them away from their loved ones. While the things that an individual leaves behind vary between persons, everyone wants to feel secure that their property will benefit their loved ones after their demise. Unfortunately, due to estate taxes, this may not translate into reality. This is why everyone should understand how estate taxes work and what they could mean for a person’s property.

What Can be Taxed?

An estate tax, also morbidly known as the “death tax,” is a tax on a person’s property after their death. This property can include business interests, real estate property, cash, insurance, annuities and a variety of other assets. It’s obvious that the term “death tax” properly describes the estate tax in a condensed way, and while it may seem unfair that a person could be taxed even after their demise, it is a process that has been around for generations.

It’s the Internal Revenue Service (IRS) that levies this tax, so many loved ones of deceased family members have to seek out IRS tax relief on their inheritance after a person in their family dies. Sadly, this can be a serious burden on already grieving family members, so it’s often best for individuals to plan for this scenario before death is even on the horizon.

Losing Property

There are a variety of things that happen to certain people’s property after their death. In some cases, for instance, the IRS will automatically place a lien against a person’s estate. This is their effort to collect any due estate taxes. In addition, portions of this estate will be used to pay off debts, and luckily, these are usually treated as deductions on a person’s taxable estate. This minor convenience, however, doesn’t make up for the difficulties that many people face.

In many instances, a person’s family members actually end up having to cover their estate taxes. This can significantly decrease their inheritance. If these taxes cannot be paid, however, the lien placed by the IRS won’t be the least of a person’s worries. This government office will sometimes actually take possession and ownership of a person’s properties, regardless of if it’s a home, car, boat or other assets, and use them to pay off this “death tax.”

Stopping the IRS

There are a variety of ways that a person can minimize the chances that their property will be taken after their death. One way of doing this, for instance, is to leave properties to a validly married spouse. This is covered under the marital deduction. Since the Supreme Court’s decision in United States v. Windsor, this rule even applies to same-sex married couples.

It’s also a good idea to employ the services of an attorney or certified public accountant to help in coming up with an estate plan that ensures IRS tax relief and protection from the Department of Revenue. These professionals have often dealt extensively with the “death tax,” and this means that they know all the ins and outs of protecting property from the seemingly greedy hands of the IRS.

Estate taxes are simply a part of everyday life, and sadly, this reality could end with the IRS owning a person’s home or other properties. This is why it’s so essential to seek out tax relief experts, whether attorneys or CPAs, to ensure that the IRS doesn’t take away what took a lifetime to earn. No one wants to leave their family members behind with burdens, and planning for this situation in advance can go a long way in making sure that this doesn’t happen.

Rebbeca Binder

Rebbeca Binder

Rebecca Binder is a stay-at-home mom to two daughters. She has been a freelance writer for five years and enjoys writing on topics relating to law and consumer information. Aside from her writing and family, her hobbies include playing piano and fitness.
Rebbeca Binder

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