QUESTION
Who pays the estate tax of my deceased mother?
Asked on May 25th, 2015 on Estate Planning - Louisiana
More details to this question:
My mother died recently and left my brother and I assets through her will. My brother is the executor of the estate. Am I responsible for paying any sort of state or federal taxes? Does it make a difference that my brother and I live in different states? Does my brother have to pay the taxes because he is the executor? Does he have to pay the taxes before or after the assets in the will are distributed? I guess I am just wondering what kind of taxes I will owe on my share.
15 ANSWERS
Commercial & Bankruptcy Law Attorney serving Powell, OH
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Ronald K. Nims
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Any estate taxes are paid by the executor from the assets of the estate. So, you shouldn't receive any money until all the estate taxes have been paid. State estate or inheritance taxes are based on the laws of the state where your mother lived at the time of her death. It doesn't matter where the beneficiaries live. You might have some income taxes on the distributions that you get from the estate. Most assets are nontaxable but some like IRAs are taxable. The executor will give you a Sch K, if any of the distributions that you receive are taxable to you. You should ask whenever you get a distribution whether any of the distribution has "income with respect to a decedent" or "income after death", so you can plan for any taxes before April 15th.
Answered on May 27th, 2015 at 4:35 PM
Edwin K. Niles
Any taxes would be paid out of the estate. But what taxes? Cal. does not have an inheritance tax, and the Federal Estate Tax has a very high threshold. Why not ask the lawyer handling the probate to explain?
Answered on May 26th, 2015 at 8:18 PM
Taxation Law Attorney serving Glendale, CA
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Irsfeld, Irsfeld & Younger LLP
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No estate tax unless her net worth was over $5.43 million. Taxes would be paid from the estate. If the estate generates income or gain, that would be subject to income tax. If you get half of the income, then you'd report it on your income tax return and pay tax on that.
Answered on May 26th, 2015 at 4:11 PM
Often, the estate pays all outstanding taxes of any kind. The money comes from the assets of the estate and debts like this have a higher legal priority than the claims by the beneficiaries. It occasionally happens that all the assets of an estate have to be used to pay off the decedent's debts and there is nothing left for the beneficiaries. If taxes accrue and the estate doesn't pay them, the beneficiaries would be responsible for the payment.
Answered on May 26th, 2015 at 12:07 PM
If the estate is worth less than, I believe currently, $5,000,000, there are no Federal estate taxes [you have to look at the state of her residence as to whether there are state taxes, but there are none in California]. It is the estate, through the executor, who pays the taxes, not the heirs.
Answered on May 26th, 2015 at 12:06 PM
Estate Planning Attorney serving La Grange, IL
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Law Office of T. Phillip Boggess
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Typically the estate pays the income taxes (final income tax return for your mother and any income tax returns for the estate). It may also pay any estate taxes. However, the IRS may collect from either the estate or the recipient. There may be a few other things going on here.
Answered on May 26th, 2015 at 9:47 AM
There won't be any estate tax unless the value of her total assets exceeds $5,000,000 +. Also, no Michigan inheritance tax. I don't know about any taxes imposed by the State where your brother lives, but that will be his problem.
Answered on May 26th, 2015 at 7:43 AM
Appellate Attorney serving Grosse Pointe Farms, MI
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Musilli Brennan Associates, PLLC
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You would do well with an attorney and counsel. The estate pays the taxes before distribution to the heirs.
Answered on May 25th, 2015 at 11:39 PM
Commercial Attorney serving Chicago, IL
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Ashcraft & Ashcraft, Ltd.
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The terms of the will control. It is likely that the will requires the executor to pay all estate and inheritance taxes before distribution of assets to Legatees. If assets are distributed in-kind then taxes may be paid by the legatee. Consult an attorney. The estate must be large, over 5 million before este taxes are due.
Answered on May 25th, 2015 at 11:34 PM
Trusts Attorney serving Sacramento, CA
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Law Office of Victor Waid
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The tax payments, if owed to various authorities, is the responsibility of the executor before distribution to beneficiaries.
Answered on May 25th, 2015 at 6:00 PM
Probate Attorney serving Newport, OR
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Minor, Bandonis & Haggerty P.C.
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All tax questions should be referred to your tax advisor. In brief, if you are an Oregon resident, you will not owe tax on the amount you inherit. If your mother was an Oregon resident, there may be Oregon estate tax to be paid by the estate. Also, if the estate earns income during the pendency of probate, you may receive a Schedule K-1 showing amounts to be reported as taxable on your tax return. Federal estate tax only applies, in general, to estates of more than $5.43 million. The estate computes and pays this tax.
Answered on May 25th, 2015 at 4:54 PM
2 Awards
Not likely there will be any taxes due. If you are asking a question like this on a website like this it is unlikely the estate is a $5M and only if it is will there be any tax due. The only exception would be if there were gains. If there are gains there may be tax on the gain but it is impossible to know without specific information regarding the estate. If you need further information, see an attorney.
Answered on May 25th, 2015 at 4:54 PM
Probate Attorney serving New Orleans, LA
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James G. Maguire
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Assuming that your mother was a Louisiana resident, there will be no state inheritance taxes due. If your mother's estate is worth less that $5.4 million, there will be no Federal estate taxes.
Answered on May 25th, 2015 at 3:58 PM
Real Estate Attorney serving South Jordan, UT
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James T. Dunn P.C.
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The taxes are the obligation of the estate and are paid from assets of the estate. If all assets are distributed to heirs without paying taxes, the heirs become liable for the taxes.
Answered on May 25th, 2015 at 3:57 PM
Estate Planning Attorney serving Baton Rouge, LA
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The Stutes Law Group LLC
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The estate tax is paid by the estate. Remember there is an exclusion of over $5 million.
Answered on May 25th, 2015 at 3:57 PM