An administration bond is a bond used by the administrator of an estate to assure they follow the provisions of the will and/or the legal requirements of the jurisdiction.

An administration bond is a bond that is posted on behalf of an administrator of an estate to provide assurance that they will conduct their duties according to the provisions of the will and/or the legal requirements of the jurisdiction. An administration bond is a bond that is posted on behalf of an administrator of an estate to provide assurance that they will conduct their duties according to the provisions of the will and/or the legal requirements of the jurisdiction. An administration bond covers the potential of financial losses to an estate due to improper acts by an administrator. If a financial institution is appointed as the administrator of an estate, then an administration bond is not required. Also, if there is a valid will or other estate planning document in place which states to not have a bond, an administration bond will not be requested.

Administration Bond

A beneficiary is any person who gains an advantage or profits from something typically left to them by another individual.

A beneficiary is any person who gains an advantage and/or profits from something. If there are multiple beneficiaries named to a life insurance policy (e.g., a primary beneficiary and several contingent beneficiaries), then they would all need to consent to any changes involving an irrevocable beneficiary. The trustee would then be charged with managing those assets according to the terms of the trust on behalf of its beneficiaries (e.g., your children).
Minor children can’t directly receive the proceeds of a life insurance policy, but you could name a trust or your children’s legal guardian as a beneficiary. If irrevocable beneficiaries are named to a life insurance policy, then the policy owner would need the consent of the beneficiary and any contingent beneficiaries to make a change. The owner of a life insurance policy can change the beneficiary at any time, though doing so typically requires completing the necessary paperwork with the life insurance company.

Beneficiary

A contingent beneficiary is a beneficiary who will receive the benefits if the primary beneficiary has died at the time the benefit is to be paid.

Retirement Topics — Required Minimum Distributions (RMDs)

A contingent beneficiary is specified by an insurance contract holder or retirement account owner as the person or entity receiving proceeds if the primary beneficiary is deceased, unable to be located, or refuses the inheritance at the time the proceeds are to be paid. Multiple contingent beneficiaries can be listed in which each beneficiary is designated a specific percentage of the money, adding up to 100%.
For a contingent beneficiary of a will, virtually any conditions may be in place; it depends entirely on the person drafting the will. A contingent beneficiary will receive nothing if the primary beneficiary accepts an inheritance. A contingent beneficiary is specified by an insurance contract holder or retirement account owner as the person or entity receiving proceeds if the primary beneficiary is deceased, unable to be located, or refuses the inheritance at the time the proceeds are to be paid. For example, after Chris and Rain divorce, Chris updates their life insurance policy so Chris' child River is the primary beneficiary and Chris' other child Riley is the contingent beneficiary. For example, Uni lists their children's step-parent Alex as the primary beneficiary and Uni's favorite charity as the contingent beneficiary for their life insurance proceeds.

Contingent Beneficiary

The Crummey trust allows families to transfer lifetime gifts to children while taking advantage of the gift tax exclusion.

The Crummey Trust: Still Relevant After All These Years

A Crummey trust is part of an estate planning technique that can be employed to take advantage of the gift tax exclusion when transferring money or assets to another person while retaining the option to place limitations on when the recipient can access the money. However, the courts disagreed and ruled in favor of the Crummey family.﻿﻿ Following the 1960s court case, the Crummey trust continues to be a viable option for families wishing to make lifetime gifts to their children while protecting against gift taxes.
One potential drawback to the Crummey trust is that providing recipients, in particular children, with immediate access to sizable gifts may jeopardize the fund's ability to accumulate long-term wealth. A Crummey trust is part of an estate planning technique that can be employed to take advantage of the gift tax exclusion when transferring money or assets to another person while retaining the option to place limitations on when the recipient can access the money. Crummey trusts are typically used by parents to provide their children with lifetime gifts while sheltering their money from gift taxes as long as the gift's value is equal to or less than the permitted annual exclusion amount. The protected fund protects from gift taxes imposed by the Internal Revenue Service (IRS).
The gift tax exclusion usually doesn't apply to gifts made to trusts.

Crummey Trust

Escheat is a government's right to assets when assets are unclaimed or a person dies without a will and legal heirs.

Escheat refers to the right of a government to take ownership of estate assets or unclaimed property. Assets may include real estate or potentially bank deposits and unclaimed securities in accounts that have been dormant for a prolonged period of time.
Financial institutions and brokerages keep records of inactivity, labeling inactive accounts dormant after a specified time period. If a probate court finds no heirs for unclaimed assets in death, then a judge would grant escheat rights to the state. U.S. states also have processes and procedures for granting escheat rights when property has been unclaimed for a prolonged period of time. Escheat rights can also be granted when assets are unclaimed for a prolonged period of time.

Escheat

An estate is the collective sum of an individual's net worth, including all property, possessions, and other assets. Discover more about estates here.

An estate is everything comprising the net worth of an individual, including all land and real estate, possessions, financial securities, cash, and other assets that the individual owns or has a controlling interest in. However, in the financial and legal sense of the term, an estate refers to everything of value that an individual owns—real estate, art collections, antique items, investments, insurance, and any other assets and entitlements—and is also used as an overarching way to refer to a person's net worth. An estate is everything comprising the net worth of an individual, including all land and real estate, possessions, financial securities, cash, and other assets that the individual owns or has a controlling interest in. Partially as a response to the stagnation of wealth movement as a result of inheritance, most governments require those in line for an inheritance to pay an inheritance tax (estate tax) on the estate. Depending on the estate owner’s intentions, a trust can go into effect during their lifetime (living trust) or after the death of the individual (testamentary trust).
The authenticity of a will is determined through a legal process known as probate.

Estate

Estate planning is the preparation of tasks that serve to manage an individual's asset base in the event of their incapacitation or death.

Title 26: Internal Revenue Code: Sec. 2032. Alternate Valuation

Topic No. 313 Qualified Tuition Programs (QTPs)

Publication 525: Taxable and Nontaxable Income

Table of Contents
Expand Other major estate planning tasks include the following:
Limiting estate taxes by setting up trust accounts in the names of beneficiaries
Establishing a guardian for living dependents
Naming an executor of the estate to oversee the terms of the will
Creating or updating beneficiaries on plans such as life insurance, IRAs, and 401(k)s
Setting up funeral arrangements
Establishing annual gifting to qualified charitable and non-profit organizations to reduce the taxable estate
Setting up a durable power of attorney (POA) to direct other assets and investments
A will is a legal document created to provide instructions on how an individual’s property and custody of minor children, if any, should be handled after death. The executor has to estimate the value of the estate by using either the date of death value or the alternative valuation date, as provided in the Internal Revenue Code (IRC).
A list of assets that need to be assessed during probate includes retirement accounts, bank accounts, stocks and bonds, real estate property, jewelry, and any other items of value. After the inventory of the estate has been taken, the value of assets calculated, and taxes and debt paid off, the executor will then seek authorization from the court to distribute whatever is left of the estate to the beneficiaries. Lack of adequate estate planning can cause undue financial burdens to loved ones (estate taxes can run as high as 40%), so at the very least a will should be set up—even if the taxable estate is not large.

Estate Planning

An executrix refers to a woman who will serve as the executor of a person's last will and testament upon their death.

An executrix refers to a woman who has been assigned responsibility for executing the provisions set forth in a last will and testament.​​​​​  The executrix, like any executor, is legally required to satisfy the wishes of the deceased as set forth in the will; it is the job of the executrix to act in the interest and on behalf of the deceased.
The executrix, like any executor, is legally required to satisfy the wishes of the deceased as set forth in the will. Among assets taken into consideration when assessing the value of the estate are any and all financial holdings, real estate, and the deceased’s possessions. Among the executor’s responsibilities is to estimate the value of the estate overall using the date of death value or the alternative valuation date according to the Internal Revenue Code. Executors are an important part of the estate planning process for people, as well as their beneficiaries, given their duty to carry out the wishes of the deceased.

Executrix

Form 706-NA: United States Estate (And Generation-Skipping Transfer) Tax Return is an IRS form to calculate tax liability for non-resident aliens.

About Form 706-NA, United States Estate (and Generation-Skipping Transfer) Tax Return

Form 706-NA: United States Estate (and Generation-Skipping Transfer) Tax Return is a tax form distributed by the IRS that is used to calculate tax liabilities for estates of individuals with U.S.-based assets that are part of their estate and who are not citizens and are not considered resident aliens. Form 706-NA: United States Estate (and Generation-Skipping Transfer) Tax Return is a tax form distributed by the IRS that is used to calculate tax liabilities for estates of individuals with U.S.-based assets that are part of their estate and who are not citizens and are not considered resident aliens. Executors of estates that would be required to complete Form 706-NA must file a tax return if the fair market value of the estate was at least $60,000.
This IRS form is used to figure out the generation-skipping transfer tax liability for estates of non-resident aliens of the United States. Form 706-NA: United States Estate (and Generation-Skipping Transfer) Tax Return must be filed within nine months following the person’s death; however, a six-month deadline extension can be requested, which would allow the estate a total of 15 months to submit their tax return paperwork. Several countries have death tax treaties with the United States, and executors reporting information on an estate from one of those countries may have to attach a statement stating that the death tax treaty is being applied.

Form 706-NA

A healthcare power of attorney (HCPA) is a legal document that allows an individual to empower another to make decisions about their medical care.

Giving Someone a Power of Attorney for Your Health Care

A healthcare power of attorney (HCPA) is a legal document that allows an individual to empower another person to make decisions about their medical care. When the patient, owner of the HCPA, becomes too ill to communicate their wishes about their medical care to others, the HCPA becomes activated—meaning that the person you named in the document has the power to make life and death decisions about and for you. A healthcare power of attorney (HCPA) is a legal document that empowers a specific individual to speak with others and make decisions on your behalf concerning your medical condition, treatment, and care. A healthcare power of attorney (HCPA) is a legal document that allows an individual to empower another person to make decisions about their medical care. Some states—namely Indiana, New Hampshire, Ohio, Texas, and Wisconsin—do not permit a universal power-of-attorney form and require that you use their state-specific form instead to designate your power of attorney.

Healthcare Power of Attorney (HCPA)

Income in respect of a decedent (IRD) is money owed to a person before they passed away, like a salary or wages. The person or entity that inherits the income pays the taxes.

Publication 559 (2019), Survivors, Executors, and Administrators

Section 691—Recipients of Income in Respect of Decedents

Publication 559 Survivors, Executors, and Administrators

Retirement Plan and IRA Required Minimum Distribution FAQs

Income in respect of a decedent (IRD) refers to untaxed income that a decedent had earned or had a right to receive during their lifetime. Sources include the following:
Uncollected salaries
Commissions
Vacation pay
Uncollected rent
Retirement income
Sources also include the following:
Payments for crops
Interest and dividends accrued
Distributions from certain deferred compensation and stock option plans
Accounts receivable of a sole proprietor
Gains from the sale of property (if the sale is deemed to occur before death, but proceeds are not collected until after death)
Income in respect of a decedent (IRD) is also a reference to any income from sales commissions to IRA distributions owed to the decedent at the time of their death. Income in respect of a decedent (IRD) refers to untaxed income that a decedent had earned or had a right to receive during their lifetime. Income in respect of a decedent (IRD) refers to untaxed income that a decedent had earned or had a right to receive during their lifetime. However, IRD also counts toward the decedent’s estate for federal estate tax purposes, potentially drawing a double tax hit.

Income in Respect of a Decedent (IRD)

Intestate refers to dying without a legal will. When a person dies in intestacy, distributing their assets becomes the responsibility of a probate court.

Intestate refers to dying without a legal will. The probate process for an intestate estate includes distributing the decedent’s assets according to state laws. For example, a resident of Arizona, New Mexico, California, Texas, Idaho, Nevada, and Washington, who dies without a valid will, will have their estate divided according to community property laws in the state. When a person dies in intestacy, determining the distribution of the deceased's assets then becomes the responsibility of a probate court. The administrator functions like an executor (legal representative named in a will), receiving all legal claims against the estate and paying off the outstanding debts, such as unpaid bills.

Intestate

Legacy planning is a financial strategy that prepares a person to bequeath their assets to a loved one or next of kin after death.

Legacy planning is a financial strategy that prepares people to bequeath their assets to a loved one or next of kin after death. Many people don't realize how high taxes on their estates can be, and they often don't realize the true value of their assets, so it's key to meet with a financial advisor during the planning process to make sure that all potential tax scenarios are taken into account. First, the financial advisor guides you toward reaching a level of financial security that will both provide you with a comfortable life and allow you to leave wealth as a part of your legacy. After addressing the issue of financial security, the financial advisor gives advice on how to ensure that your affairs are managed and continue to prosper after they've been passed on. A kind of financial service, legacy planning is often created with a financial advisor.

Legacy Planning

Next of kin is usually defined as a person's closest living blood relative, someone who may have inheritance rights, and obligations.

Microsoft's Next of Kin Process - Accessing Emails

H.R.1865 - Further Consolidated Appropriations Act, 2020

Inherited or 'Stretch' Individual Retirement Accounts (IRAs) and the SECURE Act

Table of Contents
 What (and Who) Is Next of Kin?
Understanding Next of Kin
Special Considerations
Jurisdiction Over Next of Kin
Insurance and Retirement Plans
Why Is Next of Kin Important?
How Is Next of Kin Determined?
Next of Kin & Benefits
The term next of kin usually refers to a person's closest living relative(s). The next-of-kin relationship is important in determining inheritance rights if a person dies without a will and has no spouse and/or children. If the spouse is also deceased, and there are no living listed beneficiaries, those assets may flow to the deceased's next of kin, depending on state law. The recipient(s) of proceeds from a decedent's life insurance policy, or their retirement accounts such as 401(k)s and individual retirement accounts (IRA), are designated in a different way than other bequeathable assets.

Next of Kin

The notice to creditors is a public notice usually posted in the local newspaper by an executor as part of the probate of the estate of a deceased person.

The notice to creditors is a public notice usually posted in a local newspaper by a trust or estate's executor as part of the probate of the estate of a deceased person. Still published in local newspapers, the notice is filed by the estate's executor and meant to facilitate the probate proceedings.
Creditors will have a limited amount of time to respond to the notice, which may also be filed by individuals declaring bankruptcy.
In the United States, when a person dies, there is typically at least an informal probate process of the deceased's estate. The notice serves as the official notification to both creditors and debtors of the probate of a deceased individual’s estate and may run for a period of weeks depending on state laws.
The executor or executrix—in some states known as the personal representative—is charged with paying outstanding debts and collecting monies owed to the estate as part of her duties after being appointed by the court. The notice to creditors is a public notice usually posted in a local newspaper by a trust or estate's executor as part of the probate of the estate of a deceased person. Some states have an asset threshold allowing small estates to avoid probate, but if an interested party objects, there are assets requiring probate, or other issues exist, a probate case will be opened.

Notice to Creditors

Payable on death is an arrangement between a bank or credit union and a client that designates beneficiaries to receive all the client's assets.

There are also no limitations to a payable on death account as the account holder can spend all the money prior to his or her death, change the beneficiary on the account, or close the account completely. If a POD account has one individual named as the beneficiary, and the will of the account holder lists another individual as a beneficiary, the POD-designated beneficiary prevails. However, if the account owner wants each beneficiary to receive unequal portions of the assets in the account, they must check that their state laws allow it, given that some states only permit an equal distribution of funds in a POD account. The named beneficiary on the POD account is not required to honor the account holder’s last will and testament, which makes it imperative that the individual ensures to change or cancel the POD beneficiary if they have someone else listed on their will.

Payable On Death (POD)

Power of attorney (POA) is legal authorization for a designated person to make decisions about another person's property, finances, or medical care.

Power of attorney (POA) is a legal authorization that gives a designated person, termed the agent or attorney-in-fact, the power to act for another person, known as the principal. A power of attorney (POA) is a legal document giving one person (the agent or attorney-in-fact) the power to act for another person, the principal. While a general POA enables the agent to act with the authority of the POA’s creator in all matters, a special POA can limit that authority to a specific subject, such as managing an investment account, or to a limited period, such as while the creator of the POA is traveling abroad. Power of attorney (POA) is a legal authorization that gives a designated person, termed the agent or attorney-in-fact, the power to act for another person, known as the principal. Remember, however, that signing a power of attorney that grants broad authority to an agent is very much like signing a blank check—so make sure you choose wisely and understand the laws that apply to the document.
Power of attorney (POA) is a legal status granted to somebody that allows them to act on your behalf.

Power of Attorney (POA)

A probate is the legal process in which a will is reviewed to determine whether it is valid and authentic. 

Table of Contents
What Is Probate?
How Probate Works
Probate with a Will
Probate Without a Will
Is a Probate Always Required? The executor has to estimate the value of the estate by using either the date of death value or the alternate valuation date, as specified by the Internal Revenue Code (IRC).
Most assets that are subject to probate administration come under the supervision of the probate court in the place where the decedent lived at death. This involves collecting the assets of a deceased person to pay any liabilities remaining on the person's estate, and to distribute the assets of the estate to beneficiaries. If a deceased person’s estate is insolvent, which means that their debts outweigh their assets, an administrator will likely choose not to initiate probate. A probate proceeding is not always required upon death but is usually essential when a deceased person’s remaining estate is of high value.

Probate

A transfer on death designation allows beneficiaries to receive bequeathed assets without going through probate. 

The transfer on death designation lets beneficiaries receive assets at the time of the person's death without going through probate. The required documents depend on the type of account, such as a single or joint account, whether one or both account holders are deceased, and whether the account is a trust account and the trustee or grantor is deceased. This designation also lets the account holder or security owner specify the percentage of assets each designated beneficiary receives, which helps the executor distribute the person's assets after death. If the account owner is not married then the assets will be automatically transferred to the named beneficiaries, assuming all the proper documentation is filed to prove the owner is deceased. If the owner of the account is married, the account will likely transfer to the spouse, even if other beneficiaries are named.

Transfer on Death (TOD)

The Uniform Simultaneous Death Act directs the release of the assets of deceased spouses to their relatives in order to avoid double administrative costs.

Uniform Simultaneous Death Act (1993), Section 5

Uniform Simultaneous Death Act (1993), Section 6

While 21 states and the District of Columbia have adopted the Uniform Simultaneous Death Act as law, others have enacted all or parts of the Uniform Probate Code as law.﻿﻿ This code governs inheritance and the estates of deceased parties by providing uniformity to the probate process. The term Uniform Simultaneous Death Act refers to a law used in some states to determine inheritance in cases where two or more people die around the same time. The Uniform Simultaneous Death Act is a law used in some states to determine inheritance in cases where two or more people die around the same time. The Uniform Simultaneous Death Act helps heirs avoid this step by clarifying issues surrounding inheritance when two or more people die without leaving wills.

Uniform Simultaneous Death Act

The unlimited marital deduction is a provision that allows an individual to transfer an unrestricted amount of assets to their spouse free from tax.

IRS provides tax inflation adjustments for tax year 2021

The unlimited marital deduction is a provision in the U.S. Federal Estate and Gift Tax Law that allows an individual to transfer an unrestricted amount of assets to their spouse at any time, including at the death of the transferor, free from tax. With the unlimited marital deduction, the amount of property that can be transferred between spouses is unlimited, meaning that a spouse can transfer all of his or her property to the other spouse, during lifetime or at death, without incurring any federal estate or gift tax liabilities on this first transfer. In other words, the unlimited marital deduction allows married couples to delay the payment of estate taxes upon the death of the first spouse because after the surviving spouse dies, all assets in the estate over the applicable exclusion amount will be included in the survivor’s taxable estate. The unlimited marital deduction is considered an estate preservation tool because assets can be distributed to surviving spouses without incurring estate or gift tax liabilities. The transfer is made possible through an unlimited deduction from estate and gift tax that postpones the transfer's taxes on the property inherited from each other until the second spouse’s death.

Estate Planning

More in Personal Finance

Terms in Estate Planning

Administration Bond

Beneficiary

Contingent Beneficiary

Crummey Trust

Escheat

Estate

Estate Planning

Executrix

Form 706-NA

Healthcare Power of Attorney (HCPA)