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Estates taxes can add up

As it currently stands, both the state of Connecticut and the federal government can collect taxes on estates. Estate taxes can really add up fast and take a lot away from beneficiaries. With some careful tax planning, it may not be so bad.

It is believed that most adults in the United States do not have estate plans in place. This means they, their assets and their beneficiaries lack a lot of basic protections in the event of their deaths. There are some ways to reduce the estate tax burden with which beneficiaries will have to deal, but it requires action.

Connecticut can assess taxes on estates valued at $2 million or above. The tax rate sits at 7.2 to 12 percent. So, if one leaves behind an estate valued at $2 million and it is taxed at the lowest rate -- 7.2 percent -- $144,000 will go to taxes. That is a significant sum being taken away from beneficiaries.

When it comes to federal taxes, the government can only tax estates valued at $5.49 million or above. That is according to the 2017 laws, it may change if tax laws are altered. So federal estate taxes may apply to fewer people, but for Connecticut residents who estates qualify, having to pay both state and federal taxes will quickly add up.

Not paying estate taxes that are due is not an option. It will only result in a lot of trouble for the executor of an estate and even bigger losses for beneficiaries. New Jersey residents who wish to reduce the tax burden that their beneficiaries may feel can speak to a tax law attorney in order to make sure they have all the protections needed put in place. Those who are dealing with the administering of an estate that lacks such protections can also seek help in order to make sure they fully and properly meet their tax obligations.

Source: fool.com, "These States Will Tax Your Assets After You're Dead", Christy Bieber, Accessed on Nov. 20, 2017

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