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Estate tax - The estate did not go through probate. Now we are being told we have to pay estate tax on what we received.

Asked over 2 years ago - Ohio

My mom's will was very detailed. The family all knew about it and her wishes before her death. She had divided her assets between the family and had let her insurance co. and IRA holders know her wishes. After my dad died, she opened a joint stock account in both of our names. Upon her death the family carried out her wishes. We contacted the attorney who did her will along with her financial planner and was told everything was ok. We did have to go through a small probate for her car. Now because of this we are being told we have to pay "estate tax" on her estate. Where do I go to find out exactly what we have to pay tax on? The stock was jointly owned, there is several life insurance policies, and IRA account. She also had a home which a family member did inherit.

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Attorney answers (3)

Elizabeth Smith Schmitz

Reputation Level 14

Answered over 2 years ago. Probate Attorney in Columbus, OH.

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Estate tax is due on all assets owned by a deceased person, even joint assets and assets that pass by beneficiciary designation. The only asset that is exempt from Ohio Estate tax life insurance provided it was not paid to the estate. This return must be filed 9 months after the date of death.

The estate attorney should review her will and the law to determine who will have to pay the estate taxes.

http://www.tax.ohio.gov/divisions/estate/index.stm

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James Leslie Walker IV

Reputation Level 9

Answered over 2 years ago. Estate Planning Attorney in San Rafael, CA.

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Fed estate tax is only due if your mother's estate's net value was greater than $3.5 M. If so, why are you slumming here? go see a CPA and an attorney and pay to do it right.
However, perhaps you are using the wrong terms- you mention IRA- all money coming out of a regular IRS is income taxable, other assets can have income aspects- see an accountant.

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Henry Daniel Lively

Reputation Level 20

Answered over 2 years ago. Tax Lawyer in Costa Mesa, CA.

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When someone dies you have to determine what the gross estate is for the purposes of Estate Taxes. If there is a taxable estate, which means that the value of the gross estate exceeds the life time exclusion amount, then a Federal Estate Tax Return must be filed within nine months of the date of death, and the estate tax paid. This is a complex process and requires the services of a tax professional well versed in this area. For instance, the insurance policies could be included in the gross estate, as well as many of the other assets you mentioned.

Any individual seeking legal advice for their own situation should retain their own legal counsel as this posting provides information that is general in nature and not specific to any person's unique situation. Circular 230 Disclaimer - Advice given in this posting cannot be used to eliminate penalties with the IRS or any other governmental agency.

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