If you recently lost a loved one, financial concerns are probably the last thing on your mind. You're going through the grieving process and this takes time. Let's say, for example, your father passed away, and you're his only heir. It will now be up to you to navigate the probate process and other legal concerns.
If your father's estate is worth over $1 million, then it may be subject to being taxed.
If you think your father's estate is taxable, don't delay
As much as you don't want to deal with legal and tax issues, reality will eventually come knocking on your door. If you're the executor of your father's estate, for example, you'll need to organize important financial issues during the probate process.
First, there will be a waiting period, when potential creditors will have the right to step forward and make a claim against your father's estate, and after all creditors and others who have valid claims have been paid -- including the IRS and Massachusetts -- then the estate assets will be distributed to you. The sooner you act to take care of these concerns, the sooner you can move on with your life and your grieving process.
What will my father's tax liabilities be?
Fortunately, when it comes to taxes, most Massachusetts residents will not need to worry about paying any death taxes due to a $1 million exemption. If your father's estate is worth over $1 million, however, you'll need to calculate and pay the estate tax liability as a part of the probate process. If your father's estate is worth more than $5,490,000, then you'll also be liable to pay federal taxes on the estate.
Get help with estate tax planning
It's best for Massachusetts residents to consider their potential death tax and IRS estate tax burdens before they die. There may be some estate planning strategies that serve to reduce an estate's tax burdens. By consulting with a Massachusetts estate planning lawyer, you can determine your potential tax liabilities and take action to either eliminate them altogether or significantly reduce them.
Source: Nov. 30, -0001