Estate planning is the organization of your financial and personal interests, so your property can be distributed to your family as easily and inexpensively as possible. Estate planning can also limit the amount of taxes your estate will have to pay. The following is some general information about estate taxes:
- The federal estate tax, if any, is imposed on the transfer of a person's property when that person dies
- The taxable estate is the total value of all property transferred at death (the "gross estate"), with deductions for specific types of expenses, debts and transfers
- The gross estate can contain all kinds of property interests, including life insurance, jointly owned property, and (in some cases) property the deceased person gave away before he or she died.
- If a decedent's gross estate exceeds a certain value, currently $5,000,000, a federal estate tax return must be filed within nine months of a person's death, although an automatic six-month extension is available.