Author Topic: Tax implications (Florida)  (Read 370 times)

Offline Doomspark

Tax implications (Florida)
« on: December 16, 2016, 02:38:42 PM »
My father in law recently told us that he's leaving my wife 20% of his estate (the other 80% going to his current wife - my wife's step-mother).  My father-in-law says that this 20% is currently worth about $300,000.00 and may well be more, depending on how long he lives.

My wife intends to take the money and set it up in trust for her niece. Yes, the psycho brat niece.  I think this is a TERRIBLE idea, but it will be my wife's money and she can do what she wants with it.

My understanding is that when my wife gets the inheritance, it will count as income for us for that tax year and we will have to pay taxes on it the following spring.  Is this correct? If so, is there some relatively simple formula for how much the tax hit will be?  Is there any way to minimize it?

Understanding does not imply agreement.
Acceptance does not imply agreement.
Disagreement does not imply conflict.

Offline Joel

Re: Tax implications (Florida)
« Reply #1 on: December 16, 2016, 02:41:49 PM »
No. The tax comes out of the inheritance before your wife receives any money. (at least federally)

I don't know local laws in Florida surrounding inheritance laws though.
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Offline Doomspark

Re: Tax implications (Florida)
« Reply #2 on: December 16, 2016, 02:51:54 PM »
Florida has no state income tax, but I don't know about inheritance taxes.  I think I will plan to hire an estate-law attorney when this comes to pass.

I was more worried about the feds - never want to get on the bad side of the Infernal Revenue Service.
Understanding does not imply agreement.
Acceptance does not imply agreement.
Disagreement does not imply conflict.

Offline Joel

Re: Tax implications (Florida)
« Reply #3 on: December 16, 2016, 05:06:38 PM »
Florida has no state income tax, but I don't know about inheritance taxes.  I think I will plan to hire an estate-law attorney when this comes to pass.

I was more worried about the feds - never want to get on the bad side of the Infernal Revenue Service.

Taxes will definitely be paid by the estate, not the person who inherits the estate.

Instead of you hiring an estate-law attorney after the father-in-law passes, you should urge the father-in-law to make sure he has already hired the proper estate planning attorneys that are needed to make sure his wishes are executed as he wants (and as the law allows).
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