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Questions asked in estate tax valuation
Estate tax valuation is done with an intention of identifying the value of the property and thus the amount of taxes due. Below are some questions for which you might be finding answers regarding estate tax valuation and estate valuation:

1. What are estate taxes? Most people confuse the difference between probate expenses and estate taxes. Probate expenses can be avoided with a revocable living trust. Federal estate taxes are taxes that must be paid in cash within nine months of death of the owner. Some people result to liquidating assets to pay these taxes, but you can actually reduce and eliminate the taxes if you plan ahead.

2. Who pays estate taxes and who should do estate tax valuation? The congress has set some amount exempt from taxes and any amount beyond this must be paid. The exempt amount currently is $1 million and the top tax rate charged is 55%. Apart from the estate taxes, you should check to see if your state has its own death or inheritance tax.

3. How is the net value of my estate determined? Estate valuation is the procedure of establishing the value of your estate. The net value of your estate is determined by adding up all the assets and then subtracting the total debts. Estate valuation is done in consideration of your personal property, IRAs, retirement and death benefits from life insurance, bank accounts, investments, home and business interests.

4. How can I eliminate or reduce my estate taxes? After estate tax valuation, you can use both (yours and your husband’s or wife’s) estate tax exemptions if you are married, and that reduces the tax. Another way of reducing the tax is buying life insurance to replace assets that you give to charity or to pay the remaining estate taxes. Another way of reducing the amount is removing assets from your estate before death. In the last option, although leaving your spouse an unlimited amount when you die can lead to reduction of the estate tax, the tax amount might increase when he or she later dies.

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