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| KINDS OF ESTATES To the layman, the parlance of estate planning can be very confusing. Professionals often use the term "estate" in a variety of ways. And, as long as they are discussing the subject among themselves, they understand the precise meaning of the term. In order to help you more fully and easily understand the subject, you need to know that there are five kinds of estates. They are these: bankruptcy, attachable, distributable, probatable and taxable. The Bankruptcy Estate is the sum of assets that a person may keep after having declared bankruptcy. In most states, the bankruptcy estate consists of a modest home, a reasonable automobile and the tools of one's trade. The Attachable Estate consists of the assets that might be taken from you if someone got a judgment against you. Having a judgment, that person could come an "attach" or "take away" many of your assets. The Distributable Estate consists of assets that you can distribute. You can spend them on self, family or charitable causes. You can distribute them. The Probatable Estate consists of assets that you list in the application for probate when you go down to the probate court to probate a deceased person's estate. These assets come under control of the probate court ... and can be delivered to heirs only under the direction of the court. The Taxable Estate consists of assets that are subject to state or federal death taxes. The federal government has an estate tax. Many states have estate or inheritance taxes. Grouped together, these state and federal taxes are usually called "death taxes." If you will learn these five kinds of estates and will make a mental note of exactly how you are using the term "estate" each time you use it, you will understand this entire subject much better. Try to always say "Taxable Estate" if that is the one you are discussing. This little discipline will help you to both understand the subject ... and to communicate it. To get assets out of both your taxable estate and your probatable estate,
you may want to consider a charitable trust. In a charitable remainder trust,
just tell your attorney to make |
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