My Mother has a Family Trust and upon her death everything will come to me. We live in Oregon. She is now 92 and I am 72. Upon her death do I need to pay a Death Tax?
The “death tax” is called an estate tax by the IRS and tax professionals. Even though it’s a politically popular term, most people do not have to worry about paying an estate tax. It generally only effects moderately to very wealthy families, or families with businesses or farms. Currently, the IRS only taxes estates valued at or above $5,450,000. The State of Oregon will tax an estate valued over $1,000,000. If your mother’s assets (home, savings, investments, art, jewelry, etc.) are less than $1,000,000, her estate will not be taxed at all. Because your mother has a trust already, an estate attorney will be able to advise you as to how that trust will be treated upon her death. This kind of attorney specializes in structuring an estate for “regular” people as well as wealthier individuals or people with complicated finances. Moreover, an estate attorney can equip you and your mother with all of the legal paperwork necessary to make it easier to address your mother’s needs in the coming years. For example, an attorney can provide you with a durable power of attorney and HIPAA waivers so that you (or other designated people) can make financial and medical decisions for your mother if she is incapacitated and discuss any medical issues with your mother’s doctors.