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A net estate is the total value of a decedent's estate after all of the administrative costs have been deducted. The net estate is the portion of the estate that is regarded as taxable and it is also the portion that is distributed to people designated in the will. Determining the value of the net estate takes place during probate, a process that may be supervised by a probate lawyer. A skilled accountant can also be a valuable person to have on hand while probating an estate and making estate plans in advance of death.
The total value of someone's estate at the time of death is known as the gross estate. When the estate enters probate, one of the first tasks that takes place is an accounting of everything the deceased person owned for the purpose of finding the value of the gross estate. This includes cash assets, real estate, investments, and any other assets owned by the decedent. It is important to note that valuing the gross estate does not determine who gets what. This process is conducted solely to provide a complete account of everything the decedent owned for the purposes of processing the estate accurately and fairly.
Once the gross estate has been calculated, expenses can be deducted. These include funeral expenses and the costs of settling any debts. In addition, there are administrative expenses associated with probate including fees for handling documents and a fee paid to the executor of the estate. The remainder left over once these expenses have been accounted for is the net estate.
The executor is responsible for distributing the net estate between the beneficiaries in accordance with the wishes expressed by the deceased. When a will is very precise, this may not be a challenging task. In other cases, wills may be unclear or outdated, and beneficiaries themselves may contest about their inheritances. This can cause probate to drag on as the terms of the bequests are litigated.
Laws about inheritance taxes vary. Part of estate planning should include an exploration into these laws to determine the tax implications of bequests in a will. Some people may opt to distribute assets before they die in order to reduce the size of the net estate so that beneficiaries will not be taxed. Estate planning can also include the establishment of a trust to hold assets on behalf of beneficiaries, as parents may do for children who have not yet reached the age of majority.
I don't know a whole lot about wills and estates, but it seems like the more an estate is worth, the longer it takes to settle.
There are also cases where once all the fees are paid to attorneys and other people involved, the net estate is only a fraction of what the gross estate was.
When my in-laws passed away, my sister-in-law was the executor of their estate. She is very efficient, but usually drags her feet on just about everything she does. This was no exception.
The only family member who really had a problem with this was the oldest brother who was an alcoholic. He thought receiving his share of the money would solve
a lot of his problems.
The sad thing is, he received a small portion of it ahead of time and it was all gone within a month. He ended up passing away before the estate was settled, and his share went to his kids.
I am glad my mother-in-law didn't have to go through losing a son, and also know that the money was in better hands with the grand kids than the son.
I know I am listed as the executor of my parents estate, and I am not looking forward to it.
I have a brother-in-law who is very controlling and hard to deal with. I have no idea how he is going to react when the time comes, but if the past is any indication of how he will react in the future, it will be a long road.
When it comes to that point, I think I will just hire an attorney to distribute the assets and stay out of it as much as possible.
I am afraid if I am the one who takes charge of this, it will ruin the relationship I have with my
sister. Even though I get frustrated with the way my brother-in-law handles things, I still want to have a good relationship with her.
My parents are not wealthy, so the net estate will not be that much money. For me, it's not about the money in the first place, but I know my brother-in-law will want every cent he thinks they should get.
@bagley79 - You are fortunate the distribution of your dad's estate was a smooth process. Unfortunately that isn't always the case with a lot of families.
If a will has not been drawn up, or if it is outdated, this can cause a lot of problems and setbacks. This also makes the probate process much longer.
I work for an attorney who deals with estates all the time, and just when you think you have seen it all, something new comes along.
For some reason when it comes to a person's estate, this often seems to cause a lot of contention and strife among family members.
The longer it takes, the more agitated and impatient people can
be. I am always telling my friends and family members to make sure they have a will.
Once they have a will made up, they also need to make sure it is kept up to date and is very specific. If people could really see what happens a lot of time, I think they would do things very differently.
Sometimes families end up being divided over the smallest details that could have been avoided with planning ahead of time.
When it comes to processing a will and distributing assets, I think one of your best investments would be a good attorney.
When my dad was having his will made up, he got professional help because he knew he didn't begin to know and understand all the tax laws.
His will was easy to process because everything went equally to the kids, and they didn't have much debt. He was concerned about the tax consequences we would face once we received the inherited money.
The trouble and expense he went to really made it much easier on all of us. This was just one of the ways my dad was always thinking about others, and wanting to make sure things were done right.
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