When a loved one passes away, closing out his or her estate can be a real ordeal. Part of the process may involve paying estate taxes. What about inheritance taxes? Does the state of Connecticut collect such taxes, or are these the same as estate taxes?
Many people consider estate and inheritance taxes to be the same thing. They are not. Estate taxes come from calculating an estate's net value and subtracting any liabilities. If the end value of the estate reaches a certain amount, estate taxes will need to be paid.
Inheritance taxes are the responsibility of an estate's beneficiaries. Connecticut does not actually collect an inheritance tax any longer. However, Connecticut residents who are the beneficiaries of estates being closed out in states where inheritance tax is still collected may want to talk to an attorney about how this tax works. It may be possible for beneficiaries to avoid this tax entirely if the will states that the estate is to cover the inheritance tax.
When it comes to estate taxes, the laws can change from year to year. Connecticut residents who have questions about estate or even inheritance taxes can turn to an experienced tax attorney for assistance. No one wants to have to pay added taxes and penalties for not paying estate taxes in full and on time. Legal counsel can help one make sure the proper amount is paid in the proper time frame. Further assistance can be provided if the Internal Revenue Service questions the tax filing and payment.