Legal Question in Wills and Trusts in Virginia
Estate administraion
My brother died intestate. His estate is being administered and a death in service benefit to a named beneficiary and a pension fund benefit to another named beneficiary has been included in his estate for tax purposes. Is this correct as I understood that such named benefits should be excluded from the estate. The inclusion of these benefits caused the estate to exceed the threshold for tax liability. Please advise.
2 Answers from Attorneys
Re: Estate administraion
Yes, these kinds of bequests/assets would normally pass outside of probate, so then the question becomes who made the decision to include them in your brother's estate?
Re: Estate administraion
There is a distinction between the probate estate and the taxable estate. Many items, such as life insurance, pension benefits, POD designations, joint accounts, etc. will not fall into the estate to be probated, but will be viewed by the IRS as within the taxable estate for estate tax purposes.
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