Government Affairs

Women Need to Care About the Death Tax

We all know that women out live men. This means that the management of their community property, after the death of their husband, is left up to the woman. She has to decide what property goes to whom and what protection she needs for the property at her death. She must cause to be prepared the final tax return of her husband and may at that point realize that at her death a tax will have to be paid on the assets of her estate. In addition to the many taxes that she and her husband have already paid during their lives (income, payroll, capital gains, sales, excise, gasoline, property, etc.), another tax must be paid nine months after date of her death. It is the death tax on all of her assets, including, but not limited to, real estate, autos, personal property, stocks, bonds, IRA's, limited partnerships, family businesses, etc., at a rate of 37% to 55%! Assets will have to be valued to determine the tax and some or all of the assets may need to be liquidated to pay the tax. The tax law allows each spouse a $625,000 lifetime exemption but advance planning through appropriate trusts is necessary to take full advantage of that exemption. If the woman wishes to leave assets to her grandchildren, the tax could be as high as 80%! Again, she is allowed a lifetime exemption of $1 million, but she must plan in advance to take full advantage.

Because women usually end up managing the assets of their marital community, they need to be aware of the death tax! They also need to be aware of the steps that are being taken by women like Congresswoman Jennifer Dunn (R-WA) and co-sponsored by Congressman John Tanner (D-TN) to eliminate the death tax (or as is referred to in the IRS code - "estate, gift and generation skipping tax"). In 1999, Congresswoman Dunn introduced a bill that reduces the rate of the death tax by 5% a year for 10 years, with the ultimate repeal of this tax on family assets. Families should not have to pay a tax, when a family member dies at the highest rate of tax in our tax system, on assets that have already been taxed before. Call, write or e-mail your legislator to repeal the death tax.

Patricia M. Soldano, President of Policy and Taxation Group
3941 South Bristol Street, #46
Santa Ana, CA 92704
Phone: (714) 641-6913
Fax: (714) 641-3128
(http://www.policyandtaxationgroup.com/)