The word “estate” can mean different things. To some, it means what you own. To the Internal Revenue Service, it is the property of the decedent subject to estate tax. To a probate attorney, it means those assets that are transferred by the Last Will and Testament. We call that the “probate estate.”
Doesn’t a Last Will and Testament transfer all the assets of a decedent? Although it can, many assets are transferred by means other than the terms of a Will, including direct beneficiary designations, right of survivorship agreements, and payable on death transfers. Although these non-probate assets may be part of a taxable estate per the Internal Revenue Code, they are not part of an estate inventory filed at court. Therefore, there can be different rules for different assets, which can make things confusing.
Avoiding probate by using a these non-probate transfers can make your estate more difficult and confusing, so it is very important to coordinate your estate plan and your beneficiary designations or survivorship agreements. You do not save money on probate by having fewer assets to pass through probate, and for most people, trying to avoid probate with beneficiary designations is inflexible and causes more problems. In our estate planning, we look to coordinate all assets to assure that there is a cohesive plan that leaves your assets where you want, controlled by the people you want, and protected to the greatest extent possible from creditors.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, specific tax, legal or accounting advice. We can only give specific advice upon consulting directly with you and reviewing your exact situation.
