Clients are often concerned about the tax that may be due at their death.
Today, estate tax is not much of an issue because for single person, estate tax is only due if your estate worth more than about five and a half million dollars and for married people it is only due if your estate over eleven million dollars.
I sometimes joke with my clients that I hope someday to pay estate tax.
The more common tax paid at one’s death is income tax.
Many people have retirement plans like IRAs, 401(k)s, or 403(b)s – and these accounts are typically pre-tax.
That means that you did not pay any tax on the money that you contributed to these plans.
If your family inherits money from your retirement plan, they will need to pay income tax on that money as they withdraw it from your plan.
For more information please visit Willingham and Cote.com