Do I Have To Pay Income Tax On Money I Receive From An Estate?
Do I have to pay income tax on the money I received from an estate? The answer is no, you don’t, unless the money that you are receiving was interest, or other income from the sale or generated dividends or from estate assets. So let, if there’s a bank account, in the decedent’s name, I’ll say a hundred thousand dollars, and, and then that’s distributed to you, it’s cash. So there’s no income tax that you have to pay on that money. If there is a piece of real estate involved and the property is then sold, and then you get a portion of the sales proceeds of the from the sale of the real estate again, you don’t have to pay any income tax on it. If the property was sold for the same value as what it was at the time of the decedent died, that’s called a step up in basis, under the probate code. And, what that means is that when someone passes away, the Internal Revenue Service values, the property here says your basis or what you have to pay tax on is based upon the value as of the date of death versus the sales price. So, if the property is sold shortly after someone dies, then there’s not going to be any tax that has to be owed. If the property was not sold shortly after the person dies, it’s many years later, then you need to establish the value as the date of death and then subtract that from the amount that is sold. And then you would have to pay long-term capital gains on a portion of that. Sometimes you may receive dividends from stock that’s in the estate and that’s usually shown to you through a fiduciary tax return. And it’s called a K one. That’s many times offset by the attorney fees and cost. Of course this is, you know, it’s very specific because if you have a very large estate with lots of money coming in, well that would be one thing. Or if it’s a very small estate, then probably you’re not going to wind up having to pay any income tax on this. And the same things go if you get life insurance. You don’t have to pay on the death benefit if you receive some interest that had accumulated on the cash surrender value of the life insurance, well that is taxable income to you. Same thing with annuities that you have to pay tax on that money that you receive. Same thing with IRAs and 401, if you have any questions, give me a call at (727) 847-2288.
- Published in Estate Planning, Probate, Videos
If My Husband Dies, Do I Have To Pay His Medical Bills?
If my husband dies, do I have to pay his medical bills? The answer to the question is no, you do not. That is unless you have signed to be responsible, uh, for his medical bills. So whenever, if you do lose your spouse you do not have to pay their medical bills. Most of them are usually covered by insurance, but you’re not personally responsible to pay them. If you have any questions, give me a call at (727) 847-2288.
- Published in Estate Planning, Probate, Videos
What Happens When You File a Claim Against a Probate Estate?
What happens when you filed a claim against a probate estate? Well, once you file your claim, it has to be filed within three months of the date of the notice accreditors within 30 days of the date that you received the notice if it’s past the 30day period. And the personal representative by statute has an additional month after the three-month period expires before they’re obligated to start paying these claims. A lot of the payment of the claims depends on whether or not the estate is solvent and whether or not they’ve been able to collect the bank accounts, in order to be able to have the money to pay. The claims are not all created equally. There are expenses of the estate in claims, and there’s a priority of which expenses and claims get paid first. At the top of the list of expenses is the, the attorney fees for handling the probative of the estate and the executor’s fee and handling the estate. That’s the number one. Those get paid first. Secondly, it’s the funeral bill or reimburse whoever pays for the funeral bill as the next category of claims that get paid. The third one, are medical expenses and medical bills that were incurred in the last 60 days before the decedent passed away. Credit card bills and other bills are on down the list as far as the priority of payment, but if there’s sufficient money to pay all of this, the estate administration takes anywhere from six- nine months to a year, depending on the circumstances of the estate and the look and the liquidity. If you have any questions concerning this, give me a call at (727) 847-2288.
WHAT IS PROBATE
What is probate? Probate is the court proceeding, that you use to pass the deceased person’s assets to their errors or beneficiaries. If they have a will it designates who the beneficiaries are. If they die without a, will, it passes to decedents and probate only deals with assets that are just the decedents name alone. So they are not, assets are not subject to probate. If they’re jointly held or they have a designated beneficiary. Also the probate process has the rights of creditors and creditors only have a right to collect their debts from the property that is owned by the decedent at their death. And so that is a purpose of the probate is to see that the beneficiaries receive the assets and that the creditors are of the decedent are paid from those assets. If you have any questions about probate, give me a call at (727) 847-2288.
Does My Will Have To Be Probated
Does my will have to be probated? Your will does not have to be probated unless you have assets that are just in your name alone by having a will designating, the beneficiaries does not avoid probate. What avoids probate is titling your assets with a beneficiary designation or holding those assets jointly. So whether or not your will has to be probate depends on whether or not you die owning any assets that are titled just in your name. Most of the time that I see is it’s real estate that is in the decedent’s name and there’s no beneficiary designated on the deed. So to avoid probate, you can do estate planning. So if you have any questions about probate or how to avoid probate and estate planning, call me at (727) 847-2288.
- Published in Estate Planning, Probate, Videos, Wills