Tax Implications of Trusts - Trusts are subject to high capital-gains tax rates, with the top 20% rate applicable after only $15,900 of taxable income in 2025, plus a potential 3.8% net investment income tax [1][2] - Beneficiaries receiving trust assets "in kind" take a carryover basis, meaning they only pay capital-gains tax upon selling the assets at their personal rate [1][2] - Proper documentation is essential for heirs to comply with tax obligations, including maintaining records of tax filings and fair-market values of inherited assets [4] Estate Tax Considerations - The federal estate tax applies to individuals with assets valued at $13.99 million or greater at the time of death, with rates ranging from 18% to 40% [3] - State inheritance taxes may also apply depending on the jurisdiction, and these taxes are paid by the executor before asset distribution [3] Investment Strategies - Investing inherited assets can lead to significant growth over time, with an example showing that a $30,000 investment in the S&P 500 could grow to $116,091 after 20 years at a 7% annual return [7] - A diversified investment approach is recommended, taking into account personal financial situations and market conditions [10]