Estate Planning Information from Attorney Douglas Kuthy
This post is one of a series I am writing to educate people about estate planning and probate law. To follow these posts sequentially please visit my Estate Planning Blog.
I hope that this information is helpful to you.
Estate Planning Information - What is an "Estate"?
You cannot understand what estate planning is unless you understand what an “estate” is. There are three definitions.
What is an Estate – The Simple Definition
Your estate consists of all of the property that you own. Married people have separate estates. However, estates for married people can be planned jointly. But, if the spouses disagree, I cannot plan either estate because of a conflict of interest.
What is an Estate – The Federal Estate Tax Definition
Under the Internal Revenue Code there are two definitions. For instance, the gross estate includes all property owned at the time of death. But it is not taxable. The gross estate specifically includes:
-Joint Tenancy property;
-Property subject to a general power of appointment;
-Life insurance proceeds payable to the estate;
-Refund and/or survivors annuities; and
-Gifts that you retained the right to alter, amend, revoke or terminate;
However, in contrast, to compute the taxable estate we deduct
-Estate or trust administration expenses;
-Personal debts; and
-Mortgages and liens.
What is an Estate – The Probate Law Definition
The Probate Estate is all property owned at the time of death. There are no deductions used to calculate the Probate Inventory Fee. Inventory fees are quite expensive. Here is a link for the Inventory Fee Schedule. (Click on the PDF File Link on the Web Page) Here is a link to an Inventory Fee Calculator. (At the bottom of the web page)
Now that you know what is an estate is we can begin to concentrate on why estate planning is important for everybody – not just the wealthy.