Legal Question in Wills and Trusts in Washington

Inheritance Tax Question

I inherited a fairly large sum of cash and stock/bonds, etc through a Merrill-Lynch holding from my father. He lived in Florida and I live in Washington. My sister, who lives in New York, and I split the ML account 50/50 as per the will. I have no problem with that. We paid no taxes or fees as I was told that was taken care of by my father. My question is: Do I owe any taxes such as an inheritance tax or other type of tax to either the Federal Gov or the State of Washington? Secondly, have I now moved into a much higher tax bracket because of the new holdings? The holdings do generate cash from, but held in, the account. I currently make less than $100K.


Asked on 9/23/01, 12:18 pm

1 Answer from Attorneys
Bruce Busch Bruce R. Busch, Attorney at Law

Re: Inheritance Tax Question

These are really tax questions not legal questions but I think I can answer them. First, IF all estate taxes, Florida inheritance taxes (if any), your father's final income taxes, and any estate income taxes were completely paid and satisfied from your father's estate, you owe no additional inheritance tax of any nature. That is a big "if" so make sure any final tax liability that your father's estate may have had has been satisfied.

As to your second question concerning income tax. With the above caveat, the money is now yours to save or spend as you choose. If your money is generating income you are obviously subject to income tax liability. If, on the other hand, your holdings are merely appreciating or you hold them in some form of a tax deferred acccount set up my you or your father (IRA, for example) you may not be subject to income tax until such time as the funds are withdrawn or the assets sold. This second question really should be directed at an accountant and I suggest you do so.

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Answered on 11/06/01, 4:34 am


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