Estate planning and the creation of a will involves outlining the allocation of assets following death. An important component of estate planning is something many people don’t even think about until themselves or a family member is filing their will: taxes.
Benjamin Franklin famously said there is no certainty in life except for death and taxes, and unfortunately, these two elements coexist in the realm of estate planning. As a will planner, you need to determine who will be paying your post-death taxes, and how they will be paid.
Does Georgia Have an Inheritance Tax?
Estate taxes, also called inheritance taxes, are the taxes paid on the assets left to the family of a deceased person. Inheritance taxes are only in place in some states, and Georgia is not one of them. So, Georgians are only responsible for federally-mandated estate taxes in cases in which the deceased and their heirs reside in Georgia. Though Georgia doesn’t collect an inheritance tax, if you live in Georgia and inherit the property of someone who lived in one of the following states, you may have to pay inheritance tax:
- Nebraska
- Iowa
- Kentucky
- Pennsylvania
- New Jersey
- Maryland
- Delaware
Federal Estate Taxes and Other State Taxes
There are federal taxes in place that residents of every state in the union must comply with if their case qualifies. The exemption on this tax is about $11 million, so it only applies to those with estates worth over the amount of that financial threshold.
Other states outside of Georgia have estate taxes, and people in Georgia could be required to pay those taxes if they inherit money from a relative in one of those states. The conditions depend on the other state’s laws and how they apply to heirs outside of the state.
Income Taxes
A final income tax return needs to be filed following a person’s death. The process of filing the return is essentially the same as when the person is living. Depending on if the deceased person properly filed their taxes while they were living, whoever is responsible for their taxes post-mortem may have additional filing to do.
