|
Probate
|
 |
|
Definition
|
|
Disposition of a property owner's estate after death under the supervision of a
court.
|
|
|
When Does It Apply?
|
|
When there is property titled in a person's name (this does not include joint
tenancy, life insurance not paid to estate, lifetime gifts, or property held in
trust).
|
|
|
How Does It Operate?
|
|
Estate representative appointed, property inventoried, debts and taxes paid,
and property distributed to heirs.
|
|
|
Advantages/Disadvantages
|
Advantages - major claims and disputes can be settled; probate in many
states now less complex and expensive.
Disadvantages - probate proceedings are public and can be lengthy;
probate needed in every state where property is located.
|
|
|
Estate/Gift Tax Implications
|
|
All property subject to probate is included in taxable estate. Personal
representative must file federal/state death tax returns.
|
|
|
Income Tax Implications
|
|
Personal representative must file fiduciary income tax returns.
|
|
|
Other Considerations
|
|
Liquidity from life insurance can help the personal representative settle the
estate quickly and less expensively.
|
