What are the tax implications of estate planning?

Estate planning involves making legal arrangements which allow individuals to manage their assets and finances while they are alive and distribute them when they die according to their wishes. This can also involve minimizing tax liabilities in the process. In California, estate planning requires that individuals are familiar with federal and state tax law to ensure they make the best financial decisions. In California, estate planning must adhere to the Federal Gift Tax Exclusion. This exclusion states that individuals are allowed to make gifts of up to $15,000 in cash or assets to another individual tax-free. This is the same for both federal and California state taxes. When an individual dies, the estate of that individual is subject to the California Inheritance Tax. This tax is based on the appraised value of any property, assets, or cash left behind. It is also determined by who receives the inheritance, whether it be a spouse, an immediate family member, or an unrelated individual. The amount of tax due is usually 5 percent for close relatives and up to 15 percent for those who are not close relatives. It is important for individuals to be aware of estate taxes in California so they can make informed decisions when planning their estate. With careful estate planning, individuals can minimize any potential taxes that may be due at the time of death. An experienced estate planning lawyer can provide guidance to ensure that the best options are chosen to create an effective estate plan.

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What are the tax implications of estate planning?

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