New California Estate Tax Proposed for 2020
The Los Angeles Times recently reported on a measure California voters will face in the upcoming 2020 statewide election to consider a, “state-mandated [estate] tax on the assets of wealthy residents, one that could generate as much as $1 billion a year for low-income families, under legislation introduced in the state Legislature on Tuesday.”
In 2017, the federal estate tax was loosened to affect estates worth more than $11.4 million individually or $22.8 million for married couples. The proposed Senate Bill 378 would impose a tax on estates larger than $3.5 million for an individual, similar to the federal estate tax that was applied between 2009 and 2011, however would phase out once the estate hits the current federal requirement to avoid double taxation.
If passed by the legislature and voted on in the upcoming election, revenues from Senate bill 378 are slated to address socioeconomic inequality through programs that benefit low-income families including child savings accounts.
Just what is the federal estate tax?
Many Californians may not be familiar with the term, or whether the proposed bill will apply to them. According to the IRS, a federal estate tax is, “a tax on your right to transfer property at your death. It consists of an accounting of everything you own or have certain interests in at the date of death.” However, the estate tax is more complicated than this and also takes into account any assets, trusts, annuities, business interests, as well as debt, mortgages, surviving family members, and/or charities. CunninghamLegal’s business is estate planning and we know how many moving parts there are to handling a loved one’s final affairs, including the federal estate tax.
Estate planning and staying up-to-date with current tax laws may seem overwhelming, which is why we do it for you. At CunninghamLegal, we help you create a customize plan that allows you to choose what kind of legacy you leave behind, alleviating future confusion and unnecessary difficulties during an already emotional time. Do you have questions about your estate and how California tax laws, including this future one, will affect you? Join us for one of our FREE seminars and receive a consultation with one of our knowledgeable, licensed attorneys.