The Taxable Estate vs. The Probate Estate?
The taxable estate is an estate tax concept. It includes the decedent’s interest in every type of property owned at death, plus property over which the decedent had control at death, even if he or she did not actually own the property. The decedent’s taxable estate includes his or her probate assets AND non-probate assets. Just because the distribution of certain assets at death, such as life insurance proceeds, a retirement account, or a jointly owned house, are not controlled by a will (and are not probate assets) does not mean that those assets are not subject to the estate tax.
The probate estate includes only those assets that are subject to the decedent’s will (or subject to intestate succession, discussed earlier in this book). The taxable estate includes all of the decedent’s assets, even if the assets do not go through probate.
The Difference Between The Taxable Estate vs. The Probate Estate is discussed in more detail in my book “Nothing But The Truth About Estate Planning, Probate And Living Trusts”. Download your copy here:
Nothing But The Truth About Estate Planning, Probate And Living Trusts by Larry Israeloff CPA & tax attorney.