Federal Estate Tax in the United States is a Tax on the transfer of the Estate of a deceased person.  The Tax applies to property, whether real or personal, via a will, through an Intestate Estate or Trust. The Estate Tax is part of the Unified Gift and Estate Tax system in the United States.  The other part of the system, the gift tax, applies to transfers of property during a person’s lifetime.

In addition to the Federal Estate Tax, many states, including UTAH have imposed similar taxes.  These taxes are often termed “Inheritance Tax.”  It is often referred to as the “Death Tax.”

If an asset is left to a Federally recognized charity or a spouse, the tax usually does not apply.  In addition, up to a certain amount varying year by year, ($5,340,000 for estates of persons dying in 2014, $5,430,000 for estates of persons dying in 2015, and $5, 450,000 for estates of persons dying in 2016,) can be given by an individual, before and/or upon their death, without incurring federal gift or estate taxes.  This is referred to as the “Estate Tax Exemption.”

Screen Shot 2016-01-08 at 3.13.32 PM

Screen Shot 2016-01-08 at 3.11.39 PM

Often many Estates are taxed on the proceeds of Life Insurance that is payable to named beneficiaries.  An Irrevocable Life Insurance Trust can avoid the taxation of Life Insurance as being part of one’s taxable estate.

The surviving spouse can use his/her deceased spouse’s unused exemption. Totaling $10.9 million without having to use an A/B Trust Providion.

Screen Shot 2016-01-08 at 3.15.49 PM

Screen Shot 2016-01-08 at 3.17.35 PM