There are several different types of taxes that must be paid after someone passes away. Primarily their final income tax and taxes on any earnings by the estate itself. Most inheritances are not taxed at all, with a few exceptions.
Taxes are often the last thing we want to deal with while grieving our loved one. But the good news is that for most estates, filing your loved one's taxes is actually quite simple and very similar to filing your own.
Many people find the federal gift tax confusing, because unlike most taxes it is paid by the giver, not the receiver. This special kind of tax may have an impact on your loved one's estate, so it's helpful to understand how it works.
Taxes can sound scary, but the truth is that in the vast majority of cases, paying taxes for your loved one and their estate is really very simple. There are several different kinds of taxes you will want to be aware of, however. Detailed information on each can be found right here.
We speak the specialized language of estates and funerals so you don’t have to.
The person appointed by the court to handle the estate of someone who dies without a will.
The duties of an administrator are similar to those of an executor, but as there is no will to execute, he or she is named administrator and distributes assets according to a procedure dictated by state law.
The sum total of someone’s net worth, including all assets. From a legal standpoint, an estate is not simply everything the person owns, but the value of all of these assets minus any debts or other liabilities. Estates are calculated differently depending on their purpose.
For example, the taxable estate may include assets that are not in the probate estate.
A service held to commemorate someone’s life. Memorials are generally considered distinct from funerals in that they are held without the body present and are not focused on the burial, although services where the urn with the loved one’s ashes is present are also called memorials. Traditionally, a funeral is a more formal service while memorials are often more unstructured.
To see the full glossary