When creating an estate plan, you may have a variety of concerns to address. You may want to provide for your family, protect your underage children, support loved ones with special needs or achieve a variety of other goals. However, if you do not consider the impact of taxes when creating your plan, your loved ones may not receive the support you intended.
What should you know about taxes when creating your estate plan?
Does Tennessee law involve estate taxes?
For residents of Tennessee, concerns about estate or inheritance taxes on a state level may not be an issue. Since 2016, the state has not charged inheritance or estate taxes after a person’s death. This means that those who pass away after that date do not need to worry about state taxes impacting their estate or about their loved ones within the state needing to pay taxes on what they receive.
When do estates need to pay federal estate taxes?
While Tennessee does not charge inheritance tax, those who have built greater wealth in their lifetime should still consider the impact that federal taxes may have on their estate. In 2022, estates with values lower than $12.06 million for individuals or $24.12 million for married couples do not pay estate taxes. However, those with significant financial assets, real estate holdings, stake in a business or other valuable assets may need to consider the impact of federal taxes on their estate.
With careful consideration, you can address the impact of taxes and create an estate plan that achieves your goals for your legacy.