Estate Planning – Probate and Estate Administration Tax

Estate Planning – Probate and Estate Administration Tax

 

Probate is the process whereby the court validates and approves the will (if there is one) and the appointment of the executor.  Probate is generally required where the estate holds real estate, bank accounts, investment accounts, or other major assets that are held by third parties that will need a validated will in order to transfer the assets.

 

To get probate, the executors (or family members, if there is no will) apply to the court for a certificate of appointment, commonly called letters probate (basically, a certificate validating the will).  In order to obtain probate, the estate must pay to the court the relevant amount of Estate Administration Tax (commonly referred to as Probate Fees).

 

Estate Administration Tax is based on the fair market value of the assets in the estate, and calculated as 0.5% on the first $50,000, and 1.5% on the value exceeding $50,000.  With the exception of mortgages on real estate, liabilities cannot be deducted from the value of the estate for the purposes of calculation the Estate Administration Tax.

 

Assuming that the estate is not contentious, once the appropriate forms are filed, and the Estate Administration Tax is paid, the court will issue the letters probate.

 

If you would like to discuss your estate plan with one of our lawyers, please contact us.

 

By: LaBarge Weinstein’s Taxation, Tax Planning, and Tax Litigation team.

 

This blog post is intended to provide general information and does not constitute legal advice. You should consult a lawyer for advice regarding your individual situation.

 

Every effort has been made to ensure the contents of the blog post were accurate as of the date it was written, however, the law can change and we cannot guarantee that the information remains accurate.  In addition, because the comments above are of a general nature, they may not apply for every situation.  If you have questions, please contact us and we would be happy to discuss your individual circumstances, and whether there have been any changes to the law that would affect the information presented.