The term "estate" consists of all the property a person owns or controls, whether in his or her sole name, held in a partnership, in a joint ownership arrangement, or through a trust, and all other monies that would be generated on the person's death, such as through life insurance.
- (1) real property and things attached to it (houses, buildings, barns, etc.)
- (2) all personal property (including automobiles, bank accounts, stocks and bonds, mutual funds, stock options, cash, furniture, jewelry, art, collectibles, etc.)
- (3) all businesses and business interests (sole proprietorships, partnerships, corporations, joint ventures, and the goodwill, inventory, tools and equipment, accounts receivable, and other business property, etc.)
- (4) powers of appointment (the right to direct who gets someone else's property)
- (5) life insurance and annuity contracts, pension benefits, IRAs, 403(b)s, etc.
- (6) all debts and obligations owed to others, and
- (7) all claims you have against others, such as for the pain and suffering from an auto accident.
How Some Estates Are Taxed
Federal gift and estate tax law permits each taxpayer to transfer a certain amount of assets free from tax during his or her lifetime or at death. (In addition, as discussed in the next section, certain gifts valued at $10,000 or less can be made that are not counted against this amount.) The amount of money that can be shielded from federal estate or gift taxes is determined by the federal unified tax credit. The credit is used during your lifetime when you make certain taxable gifts, and the balance, if any, can be used by your estate after your death.
More estate law reading here:
- Estate Laws across USA
- California Estate Law Information
- Indiana Estate Law
- Kentucky Estate Law Guide
Keep in mind that while you can plan to minimize taxes, your estate may still have to pay some federal estate taxes. What’s more, your estate may be subject to state estate or inheritance taxes, which are beyond the scope of this pamphlet. An estate planning professional can provide more information regarding state taxes.