Ask Terry Questions Estate Planning when assets over 4 million

Estate Planning when assets over 4 million

By Terry Savage on August 08, 2021 | Financial Planning / Retirement

My mom has stock that has risen greatly over the last few years putting her estate at well over the 4 million mark for not having to pay taxes. Any suggestions on how we can avoid paying out taxes when she dies?

Terry Says

This is the perfect time to go to an estate planning attorney. Find one by searching the website of the American Academy of Estate Planning attorneys– www.search-attorneys.com.

I’m assuming your mom lives in Illinois. That is where the STATE estate tax kicks in. The Federal estate tax starts at assets over roughly $11.2 million — although that is subject to change.

One other important fact: Under current law, the “cost basis” of her stock is established as the value as of the date of death. That means if her heirs sell the next day, there is no capital gains tax! If they wait, and the stock goes higher, then the cost basis is the price on date of death. BUT, the new administration is going after that one too!
So her heirs could be hit with a double-whammy – Illinois estate tax AND a capital gains tax! Please discuss with a qualified attorney on these issues before making any quick decisions about what to do with the stock!

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