Readers in Texas may be interested to learn about the difference between the estate tax and probate. This is important to many who are seeking to begin the estate planning process. Both taxes and probate are among the reasons that many seek to create a plan that details how their assets will be distributed to their heirs and beneficiaries when they die.
A recent report notes that the estate tax is a federal tax. To determine f an estate is subject to the tax, the Internal Revenue Service values assets to determine their value. The assets included can include those listed in some trusts and wills, regardless if a trust owns the asset at the time of death.
Probate, on the other hand, is the process through which the commonly used estate planning tool of a will passes through the court. When a person dies, a court seeks to probate the will by making determinations as to the ownership status of property. Among the benefits of probate is the court’s ability to determine legal ownership of an asset, thus getting to the person inheriting it relatively quickly.
Estate planning has many elements that can be confusing to people in Texas. However, with a careful review of the available options, people can find that they are able to plan for the distribution of their assets when they die. This can be a great comfort to people in our state to know that they have card for those they love, both while alive and after death.
Source: investingdaily.com, “To Avoid Probate or Not?” Bob Carlson, July 31, 2013