What is the law of inheritance in USA?

Question

Actually some one I was talikng to told me that in USA, one cannot give his/her's whole property/assesets to a person; but only a portion of it. Other portion goes to the Govt. I personally doubt it but not sure.

Answer 1

First of all, inheritance laws in the US are governed by state, not federal, law.

At the federal level, taxes are imposed only on very large estates. By now, the exemption amount is $2 million, so the US government will take a portion ONLY from a gross estate that exceeds $2 million, and ONLY from the amount that exceeds the exemption -- i.e., regardless of the size of the estate, the first $2 million is tax-free. The overwhelming majority of people leave behind a lot less than that.

Some states also impose taxes, which are deductible for purposes of federal taxes. Here, however, we have to get into specifics of state law, which, of course, varies greatly.

With respect to the question of leaving everything to one person, the answer is (the most common answer in law): IT DEPENDS. It depends on your family status and who your intended beneficiary is. Here are the relevant factors:

1. You CAN certainly leave everything to a single beneficiary anywhere if you are not married and have no children. Hell, if you are unmarried and childless, you can leave all your money to your pet -- and people do that.

2. If you are married, you can also leave everything to one person, so long as that person is your spouse.

3. If you are married, you CANNOT leave everything to one person, if that person is not your spouse. The one thing that's uniform among the states, is that you cannot disinherit your spouse. (Generally, the rule does not apply if the testatory is legally married, but separated.) Typically, unless the will provides for a larger share, the surviving spouse will inherit AT LEAST (1) some minimum base amount (e.g., $55K in New York); (2) all property jointly held; (3) the marital residence, furnishings, and cars; and (4) about 1/3 of anything that's left.

4. Louisiana is the only state where the testator cannot disinherit his or her children. Additionally, in some states, children cannot be disinherited by omission -- only explicitly.

Bottom line -- your friend is clearly wrong, and this issue is much more complicated than (s)he believes.

Answer 2

There are no US laws of inheritance. Each state has its own laws governing inheritances.

As a general rule, however, a person can leave their property to whomever they choose, all of it or a portion of it. Unless the person dies without a will and a beneficiary cannot be found at all, a person's estate will not go (escheat) to the government.

However, most states, if not all, have laws of inheritance that prevent someone from disinheriting one's spouse completely. A spouse is often entitled to certain property and to a certain portion of their deceased spouse's estate regardless of whether the will says otherwise. This is called an "elective share."

Additionally, inheritance taxes may be imposed if the estate is very large (over 2 million I think now). That tax money goes to the US government. Some states also have inheritance taxes but not all of them. I know Texas has no inheritance tax.

One thing I learned recently on bank accounts. If you have a POD (payable on death) on the account, the amount in that account will go to the designated beneficiary immediately upon the account owner's death and will pass outside the estate. You can put a POD order on IRAs, investment accounts, and bank accounts.

Answer 3

It varies by state, but generally, you can leave anything you own to anyone, and the government doesn't get any of it until the total value of the estate goes over a certain size. The only limitation on who can get what is that if you give it to someone two generations from you (such as to grandchildren) that can be subject to an extra tax, called the "generation skipping transfer tax", and the limitation that you cannot set up a perpetual trust.

Yes, you can leave everything to one person, subject to taxes if the whole estate is over a certain amount.

Answer 4

Every state is different, and some states have zero estate tax, but it is less than the federal. This year, 2007, you can give away at your death to individuals up to $2,000,000 without federal estate tax. In 2011, the amount is unlimited, but in 2012, it goes back to $1,000,000 I think.

There is no inheritance tax, as the tax is paid by the person giving it away. Bottom line, if you have a large estate, hire a lawyer.

Answer 5

Each state has its own laws so far as estates are concerned. Unless the estate is enough to have to pay estate taxes, the government doesn't get anything. If you need information from a particular state, contact an attorney or someone else familiar with estate laws there. Good luck.

Answer 6

Depending on the size of the inheritance, there are inheritance taxes due to the government. A few years ago my grandmother died and left a trust worth 5 million dollars, my dad had to pay 1.5 million in inheritance taxes, roughly 30 percent.

Answer 7

Estates over a certain amount of money may be liable for an estate tax percentage. Most estate sizes do not reach that level.

Answer 8

Every state is different. You can certainly leave your entire estate to one person. Government does not have to get anything if the estate is small enough

Answer 9

We live in Arizona and we are faced with inheriting approx. $150,000. Could you tell me if we are going to be liable for any inheritance taxes.

Answer 10

i think every state would be different..