The estate planning process can be relatively complex. The bigger an individual’s family grows and the more resources they accumulate, the greater the likelihood of administration challenges.
People hoping to maximize the impact of their legacy on others might need to address certain liabilities in their documents, including personal debts. Taxes can also be an important consideration when establishing an estate plan.
There are multiple types of taxes that may influence what happens during estate administration. Prior planning for taxes can help people minimize tax obligations and ensure that the right people receive the resources from their estates.
What taxes apply during probate?
There are several types of taxes that can influence estate administration and diminish the value of an estate. Thankfully, Georgia does not currently impose any direct taxes at the state level.
There is no state estate tax to cover. Regardless of how much the property that belonged to the deceased individual is worth, the state does not impose any estate tax obligations. Similarly, the beneficiaries of the estate do not need to worry about paying a Georgia inheritance tax based on the value of the resources they receive from the estate.
However, there could potentially be federal estate taxes to address. Those who have experienced professional success or who own high-value resources, including businesses and real property, may find that the total value of their assets puts their estates at risk of federal estate taxes.
For those who pass in 2025, the federal threshold for estate tax exemption is $13.99 million. Estates worth more than that could be subject to taxes adding up to between 18% and 40% of the overall estate value.
Income taxes can also be a consideration. The personal representative of the estate may need to file an income tax return on behalf of the decedent and cover any remaining income tax obligations using estate resources.
If the estate plan requires the liquidation of assets through an estate sale or a real estate listing, then the estate itself may owe income taxes as well. Any time the sale of assets produces $600 or more in revenue, the personal representative may need to cover income taxes based on the value of the items sold.
Proper estate planning can go a long way toward minimizing the loss of resources to taxes after an individual dies. Identifying the taxes that could apply and proactively planning to minimize them can help people pass as much property as possible to their loved ones rather than to the government after they die.