Tuesday, October 6, 2009

What is an Estate?

WHAT IS AN ESTATE? AND WHAT IS INCLUDED IN MY ESTATE?

Your estate is simply ALL OF YOUR ASSETS. Your assets include assets which are held in your name alone, or jointly with other persons, such as your spouse.

The assets of the estate may include bank accounts, real estate, stocks and bonds, furniture, cars, jewelry, and other personal property of value (art work, collections, china, crystal, etc.).

Assets of the estate may also include life insurance proceeds (if you are the owner of the policy as well as the insured), retirement accounts, and payments that are due to you personally.

The value of the estate is equal to the "fair market value" of the different kinds of assets, after you have deducted your debts.

Because of the federal estate tax that is levied on estates which exceed a certain amount, the determination of the fair market value of the estate is very important.

Value of the estate is also necessary to determine so that the trustee, executor, or other personal representative can make the distributions required by the estate plan, if any.

For example, even a simple distribution plan such as equal shares or divisions to the children must be based on what is the value of the total estate so that equal shares can be calculated.

Good estate planning requires that an inventory and valuation of the assets take place as part of the planning process, even if it is an informal inventory and valuation.

Working with a qualified estate planning attorney is critical to this kind of planning so that the intent of the client is carried out.

If you have any questions about this or other estate planning matters, please visit my website at: http://www.tompkins-law.com

DWIGHT EDWARD TOMPKINS
Attorney at Law

This blog is intended for educational and informational purposes only and is not a substitute for legal advice from a qualified attorney in your jurisdiction.

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