Estate Tax in Virginia Beach Probate Cases

There are a lot of things to consider during the estate planning process. For many people, the primary concern is ensuring the appropriate beneficiaries are recognized or all the estate assets are documented. While these issues are important, tax questions should also have a high priority.

Some jurisdictions—including the federal government—collect what is known as an estate tax. This obligation applies to assets held by large estates after the passing of the owner. An experienced attorney could answer your questions about estate tax in Virginia Beach probate cases.

What is an Estate Tax?

The estate tax applies to the transfer of property upon a person’s death. This obligation is based on the fair market value of each asset as opposed to what a person paid for them during their lifetime.

This obligation exists on the federal level. A handful of states also pursue taxation of the transfer of assets upon death. Most residents of Virginia Beach are unlikely to face estate tax issues. This is because, on the federal level, individuals with assets under a specific value are not taxed at all.

This threshold varies from year to year based on inflation. The heirs of an estate worth less than the mandated value do not have to worry about receiving a bill from the government.

There is No State Estate Tax

Currently, there is no estate tax obligation under state law for people in Virginia Beach. That means no amount of accumulated assets or inheritance will result in a debt to the government as long as the assets in question are within the Commonwealth.

In the past, Virginia has collected this type of tax. However, the impact of this tax was offset thanks to a federal credit. This tax credit was available to taxpayers who faced a state-level estate tax, and Virginia only collected the exact value of the credit. On July 1, 2007, Virginia eliminated the tax entirely. Since that date, the Commonwealth has not collected this obligation after a person’s death.

Other Estate Tax Considerations

There are potential issues to be aware of, even for someone exempt from federal estate tax after probate in Virginia Beach. One of the most common issues to be aware of is the potential for out-of-state assets to cause unexpected obligations.

For example, an estate that includes real property in a jurisdiction with an estate tax could result in an obligation in that jurisdiction. Maryland is one example of a nearby state with this type of obligation.

There could be other issues to consider, from capital gains to income tax issues. It is never a good idea to assume everything will work out. Relying on an experienced attorney is one of the best ways of avoiding unexpected tax obligations during probate.

Call an Attorney in Virginia Beach Regarding Estate Tax Issues During Probate

While it is natural to worry about sudden, unexpected financial obligations, many people will not have an estate tax obligation during probate. Those who do can take steps with the help of an attorney to carefully plan for the future. Reach out to Parks Zeigler, PLLC, today to discuss estate tax in Virginia Beach probate cases.

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Parks Zeigler, PLLC – Attorneys At Law

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