Death and Taxes

Taxes are always one of the biggest concerns of American politics. In recent years one tax in particular has gained a lot of attention: the estate tax. Nicknamed the death tax by its opponents, this tax applies to income inherited after someone’s passing. Taxes apply to nearly all exchanges of money, from wages to lottery winnings to gifts, and inheritance is no exception.

Opponents of the estate tax consider it a way for the government to get in the way of a parent’s final gift. In many cases, however, the estate tax only applies to large inheritances. For most Americans, the effects of the estate tax are not great: the inheritance must ordinarily be at least 3.5 million dollars total for any tax to apply at all. Before that total is met, the estate can be transferred tax-free to the deceased person’s beneficiaries.

For someone who is considering bankruptcy, however, receiving less than the expected windfall from a recently-deceased parent could be problematic. For someone who is considering bankruptcy, a multi-million-dollar inheritance could be nearly cut in half by taxes. In addition, any income, including inheritance, can affect your bankruptcy status.

Contact a Boston Bankruptcy Attorney

If you are considering filing for bankruptcy, the sudden influx of inheritance after a loved one’s passing can be a windfall, but it can create problems as well. By working with the compassionate Boston bankruptcy lawyers of Joshua Spirn & Associates, you can form a plan for your financial future that takes all of these questions into account. To discuss your case, contact us at 800-975-5346 today.