Tuesday, August 12, 2014
Twelve Steps For Christian Estate Planning- Step #8
A Christian estate plan is one you develop by determining how God wants you to: (1) provide for your family and other “dependents” at your death and (2) have your finances managed and decisions made for you if you became incapacitated and no longer able to do those things for yourself.
Step #8 Plan for Death Taxes. Christian estate planning may be the single most important act of financial stewardship a Christian may take. Not planning to defer, reduce or eliminate your death tax liability is poor stewardship----assets that could have been preserved for family must be sold to raise funds to pay those taxes and less estate value remains to pass to family and other beneficiaries.
There are two death taxes that may be owed at the death of a Kentucky resident----federal estate tax and Kentucky inheritance tax.
Federal estate tax is owed if the total value of all of your assets at your death, whether individually-owned, jointly-owned, or beneficiary-designated and wherever situated, exceeds (for 2014) $5,340,000. Federal estate tax assets include life insurance, retirement accounts and assets in trusts. Gifts to a surviving spouse or charity at your death provide federal estate tax savings because their value reduces the portion of your estate subject to such taxes.
Kentucky Inheritance Tax is a death tax owed by some beneficiaries, no matter where they live, on the value of what they inherit from a Kentucky resident. Your spouse, children, grandchildren, siblings and charitable beneficiaries are exempt from having to pay Kentucky Inheritance Tax, no matter how much they inherit from you. All other beneficiaries will have to pay inheritance tax if what they inherit from you exceeds very modest exempt amounts----$1,000 for nieces, nephews, children-in-law, aunts, uncles; $500 for all other individuals and non-charitable organizations.
Next Month-Step #9 Include a Legacy Gift in Your Plan
For more information, please call us at (502) 489-3533 or toll free in KY at 1(866) 489-3533.
The information in this article is provided as general information and is not intended as legal or tax advice. For advice and assistance in specific cases, you should seek the advice of an attorney or other professional adviser.