Inheritance Tax Planning
                     Inheritance Tax Planning
When someone passes away and leaves you the fortune that they have accumulated, there is a 
possibility that you will be required to pay inheritance taxes on any money that you may have 
accumulated over the years. Inheritance taxes are different from standard state and local taxes. With 
inheritance tax you will be paying not only taxes on the inheritance but also on the interest and dividend
that you may have received over the years. A very common situation for people when it comes to 
inheritance tax is when they leave an estate that contains a substantial amount of money.
If you are looking into inheritance tax planning, you should first establish what exactly is included in the 
payment of this tax. The first thing that you need to know is what is considered a "passive" investment. 
These are some of the most common types of investments that are not subject to inheritance tax. These
include gifts, stocks, annuities, property held by corporations, and real estate. You should always consult
with a certified public accountant or tax advisor to determine which of these options will be best for 
your particular situation.
Before you can begin the process of planning for this tax, you must gather all of the documentation that 
is needed for the inheritance tax appeal. This documentation usually includes a federal tax return, any 
necessary state tax returns, copy of birth certificates, death records, marriage licenses, and other 
documentation as applicable. Most people tend to put aside a good portion of their inheritance money 
for this purpose. However, in order to fully utilize this money, you should at least make a list of the 
items that you would like to be included in the distribution. Some examples include jewelry, artwork, 
rugs, furniture, and other items that you can designate for gift distribution.
The next part of tax planning is to decide how you will use the money that you receive. Some options 
that you have included using the money for education expenses or other specified purposes. It may even
be possible to claim the full amount of gift tax if you meet the requirements for the Earned Income 
Credit (EIC). In many instances, you will also receive a refund check.
It is also very important that you protect the assets that you acquire through tax planning. If a disaster 
should occur, or if you become ill, then you may not be able to pass on the properties and assets that 
you acquire during the course of your lifetime. Therefore, it is wise to take the time and care to plan for 
the worst and to save for the future. This will ensure that you are able to pass your estate to your 
surviving loved ones when you die.
Tax preparation is always a confusing and stressful process. However, it is extremely important that you 
take the time to learn about the process and to understand the laws that apply in your specific situation.
While no one wants to pay taxes, it is better to be prepared so that your assets and money will not be 
subject to this particular tax. By taking the time to educate yourself and find out what is required for tax 
planning, you will be able to enjoy the peace of mind that comes from knowing that you are taking all 
necessary steps to protect your future.