Defining an estate is not always easy. An estate can often mean a number of things. People would consider that an estate is all of the assets that they own but there’s several uses of the term in a legal sense that can often become confusing. Here are some terms that are often interchangeable with the word estate:
Probate And Estate
A probate estate could mean dealing with any assets under the will of a person that has passed away or during intestate succession. When there is no will there is often a probate estate. Any assets will need to go through a probate process in which all assets will be successfully transferred to the next generation.
A trust estate is a process in which all the assets inside of a trust are passed down to beneficiaries. This is often a much more straightforward process but a personal often have to have a proper plan in place and named beneficiaries.
IRS And Estates
From a taxation perspective the IRS applies a different meaning to the word. The IRS is typically focused on what a descendent gross estate or the full estate value would be. As any estate is subject, to a tax the IRS is interested in knowing the full value of all property owned and the assets included in the trust or will. All assets will determine the value of the estate and the taxation value that’s associated with the estate value.
Understanding an estate from these multiple perspectives can help you to understand how assets are appropriately grouped. Defining what an estate is can be a difficult task but by seeing it from several perspectives it’s possible to apply a lens to the assets included in each aspect of the estate.
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This article was written by Alla Tenina. Alla is one of the best estate planning attorneys in Los Angeles California, and the founder of Tenina law. She has experience in bankruptcies, real estate planning, and complex tax matters. The information provided on this website does not, and is not intended to, constitute legal advice; instead, all information, content, and materials available on this site are for general informational purposes only. Information on this website may not constitute the most up-to-date legal or other information. This website contains links to other third-party websites. Such links are only for the convenience of the reader, user or browser; the ABA and its members do not recommend or endorse the contents of the third-party sites.