In the following Legacy Lessons episode, Shawn R. McClelland, Partner in our Tax, Trusts, and Estates Practice Group, uses the fictional scenario involving the “Johnsons family” to help real families understand the legal and financial responsibilities that come with inheriting a large estate. From filing requirements to potential tax-saving strategies, Shawn explains how proper planning and guidance can help heirs confidently manage the process.
Scenario
Meet the Johnsons, a group of siblings who recently inherited a multi-million-dollar estate after the passing of their parents. The estate includes investment properties, stocks, and other high-value assets—leaving them not only with deep emotions to process, but also a host of complex tax questions.
Like many families facing a significant inheritance, the Johnsons are overwhelmed. They’ve heard about estate and gift tax returns, possible deductions, and filing requirements—but aren’t sure where to start or what applies to them.
Federal vs. State Estate Tax
According to Shawn, the Johnsons must first determine whether the estate is subject to federal, state, or even inheritance tax, depending on the jurisdiction in which their parents resided. Each level of taxation can involve different forms, exemptions, and requirements.
Understanding the interplay between federal and state requirements is critical, as each jurisdiction has its own rules, forms, and deadlines. Missing even one step can result in delays or financial penalties.
Why Professional Guidance Matters
Shawn emphasizes the importance of working with qualified attorneys or accountants to handle filings correctly and on time.
Without proper support, families may risk delays, penalties, or missed obligations—especially when handling estates with high-value or complex assets. With the right team in place, families like the Johnsons can confidently manage what otherwise feels like an overwhelming process.
You can contact Shawn R. McClelland at smcclelland@mblawfirm.com or call 973-974-9405.