While many people throughout the country envy California for our beautiful landscapes and wonderful weather, others wonder how it is possible to live here under what may look like excessive taxation compared to other states. This is sometimes a misguided notion, as California does not use all the forms of taxation available.
One excellent example is inheritance tax. Currently, California does not impose an inheritance tax, but that does not mean that residents in California can inherit freely without paying attention to the fine print. Doing so may result in some serious financial complications. If, for instance, you inherit property from a loved one or relative in another state like Pennsylvania, you must account for the inheritance tax that this state imposes.
At the same time, you must also account for the federal estate tax, which applies to estates with a value of $11.18 million as of 2018. While this is a fairly high threshold, those who exceed it almost certainly wish they had not. If your estate exceeds this threshold, you may face taxation up to 40 percent. No matter who you are, no one wants to give the government more than a third of his or her estate if it is possible to avoid.
If you have inheritance and estate planning concerns, and anyone with significant assets should, then you must create a strong estate plan to protect your assets and wishes against creditors and excessive taxation. Be sure to use strong legal resources to build a resilient estate plan that protects your rights and wishes while preserving the legacy you wish to leave behind.