Green card holder/ Will

[Maples1]

What is the name of your state? Maryland

I am from Germany and I am married to a US Citizen. I received my green card November 2006.

My husband and I are very confused, we have been at 2 lawyers and got 2 different answers.

We don't want to make a Qualified Domestic Trust, since it seems not to be the right solution for our situation.

My question is: How much inheritance taxes would I have to pay and what is the amount of money which is taxfree.
We heard that 1 Million Dollar is free and over one Million Dollars I would have to pay 40% inheritance taxes. The other lawyer told us, that as a green card holder I wouldn't have any taxfree amount, so that would mean, that I would have to pay 40% taxes on everything, no matter how high the inherited amount would be.

Can anybody help us out with some provable information or maybe post a law or something else in writing?

Regards,

Jennifer

 

[tecate]

This doesn't cover any possible Maryland state transfer taxes.

I guess reasonable minds differ. I have a third take. References are to the Internal Revenue Code.

Assuming that you are a "resident alien" (the green card indicates that you should be) I am not aware of any difference in how you and U.S. citizens (your husband) would be taxed, except that your husband is not allowed the unlimited marital deduction for gifts or devises to you, because you are not a U.S. citizen. (2001(a), 2056(d), 2501(a)(1), 2523(i))

2056A covers the QDOT exception, of which you are familiar. There is also an increased amount of yearly gifts he can give you. 2523(i)

So you are treated as if you were not a spouse when figuring his federal estate tax exposure. Look to 2001 for the rates, and 2010 for the credit, which now is equivalent to $2 million. (In other words, if he died tomorrow, he can pass $2 million, less prior taxable gifts, to you or anyone else before his estate will incur tax.) 40% seems to be a guesstimate, but it is not a flat rate. You will need to experiment with the tables to see how much tax your husband's estate would pay.

The problem with forecasting estate tax is that the credit changes over the next few years, and may be changed again by Congress soon. (Most believe it will be.) I'll leave this explanation to many articles on the web.

The attorney who said $1 million may have been thinking about the gift tax limit, or the credit equivalent amount in 2011 and beyond under current law.

 

[Dandy Don]

You should be consulting with a certified estate planner (look in your local yellow pages phone book) to get your estate prepared properly and they can answer your tax questions or they can consult with a professional CPA or tax accountant who has experience with estates to get an answer for you. The lawyers primarily only wanted to take your money.

DANDY DON IN OKLAHOMA ([email protected]