Estate Planning 101: Stealth Taxes

The Bird’s Eye View:

In part three of our estate planning series, we’re talking with attorneys Chris Gaughan and Casey Connealy about stealth taxes. They are sneaky taxes that we often don’t think about or know about but can really add up.

 

Your Guide:

Welcome to part three in our series on estate planning. On this episode of Your Retirement Elevated podcast with Scott Dougan, we’ll explain four types of stealth taxes and what you need to know about them.

Our guests today are Chris Gaughan and Casey Connealy, with Gaughan & Connealy Estate Planning Attorneys.

“Stealth taxes are mandates and rules that increase revenues without raising the ire of taxpayers,” said Casey. “These are ways that the government or administrative bodies can say ‘Hey, we are going to charge a fee for this.’”

Death taxes

“One of the biggest concerns that clients express to us is they don’t want to pay any taxes unnecessarily when they die,” said Chris. “There is this assumption out there that you’re going to pay some kind of death tax.”

Death tax isn’t as bad as it looks, but it can be if you’re not careful. The way death tax works is there’s a certain amount of money you’re allowed to leave your family before you have to pay a tax. It’s called the estate tax exemption. Right now, that threshold is really high. It’s $11.7 million.

Individual retirement accounts

We’re talking about IRAs, 401ks, 403bs or any traditional retirement accounts that are pre-tax. They end up having to be taxed either to you, or your kids if you don’t spend all the money, at ordinary income rates. This is typically a much higher tax rate than paying regular capital gains.

During this episode, Chris and Casey also talk about stealth taxes on probate and other administrative fees. Listen to the full episode or use the timestamps below to find specific segments.

[2:19] – What are stealth taxes?

[4:00] – Death taxes

[7:57] – Individual retirement accounts

[11:34] – Probate

[14:09] – Delays and administrative fees

Thanks for checking out the Your Retirement Elevated Podcast. We’ll talk to you again on the next show.

 

Check out Part 1 of our Estate Planning 101 Series 

Check out Part 2 of our Estate Planning 101 Series

 

Your Guide:

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Scott Dougan, RFC, Investment Advisor – Contact