Federal
and state taxes are deducted from the assets in your estate. If you
fail to
plan for estate taxes, your estate could be reduced by federal taxes as
high as
55%, as well as by state inheritance or estate taxes. Your estate for
federal
estate-tax purposes includes, but is not limited to:
¨
At least a portion of the value of the property you hold jointly with
others;
¨
Half of the value of property you hold jointly with your spouse;
¨
Property held in your own name;
¨
The face value of life insurance you own on your life;
¨
Retirement plans in which you have an interest.
You
may deduct from your gross estate the administrative costs of the
estate,
funeral expenses, debts you owe at the time of death, and charitable
donations.
In addition, the marital deduction allows you to leave any amount of
property
to your spouse tax free. However, it then becomes important to plan for
your
spouse's death; when your spouse dies, the property in his or her
estate will
be subject to tax.