Legal Question in Wills and Trusts in New York

Re: IRA and Estate

There are several concepts of an estate. In the broad sense, one's estate consists of all one's assets, wherever located and whatever they consist, regardless of how they pass to an heir (under a Will or by direct asset registration). In the more limited context, there is one's probate estate, which are those assets that pass to heirs under a Will. Then there is one's taxable estate, being those assets which may be subject to federal or state estate taxes. The IRA is part of the gross estate for tax purposes, but is not part of the probate estate, since it had named a beneficiary. Just a note. Even if there is no taxable estate, the proceeds of the IRA are subject to income tax when received by the recipient, unless the recipient is a surviving spouse and immediately deposits the proceeds into a spousal rollover IRA account.

Walter

Re: IRA and Estate

If the IRA has a named beneficiary, then it does avoid probate. The IRA, however, is part of the taxable estate for determining if any estate taxes are due.