ARTICLES

ARTICLE 1: All About Estate Taxes

ARTICLE 2: What Does an Executor of an Estate Do?

ARTICLE 3: IRS Forms and Publications for Estate and Gift Tax

ARTICLE 4: IRS Frequently Asked Questions On Estate Taxes

ARTICLE 5: IRS What is New in Estate and Gift Taxation?

ARTICLE 6: Glossary of Estate Tax and Planning Terms and Definitions

ADMINISTRATION OF
ESTATE UPON DEATH
( ESTATE ADMINISTRATION )

In English law, Administration of an estate on death arises if the deceased is legally intestate. In United States law, the term Estate Administration is used.

Where a person dies leaving a will appointing an executor, and that executor validly disposes of the property of the deceased within England and Wales, then the estate will go to probate. However, if no will is left, or the will is invalid or incomplete in some way, then administrators must be appointed. They perform a similar role to the executor of a will but, where there are no instructions in a will, the administrators must distribute the estate of the deceased according to the rules laid down by statute and the common law. Certain property falls outside the estate for administration purposes, the most common example probably being houses jointly owned that pass by survivorship on the first death of a couple into the sole name of the survivor. Other examples include discretionary death benefits from pension funds, accounts with certain financial institutions subject to a nomination and the proceeds of life insurance policies which have been written into trust. Trust property will also frequently fall outside of the estate but this will depend on the terms of the trust. Since the Land Transfer Act of 1897, the administrator (sometimes known as the administratrix, if female) acts as the personal representative of the deceased in relation to land and other property. Consequently, when the estate under administration consists wholly or mainly of land, the court will grant administration to the heir to the exclusion of the next of kin. In the absence of any heir or next of kin, the Crown has the right to property (other than land) as bona vacantia, and to the land by virtue of the historic land rights of the Crown (and the Duchy of Cornwall and Duchy of Lancashire in their respective areas). If a creditor claims and obtains a Grant of Administration, the court compels him or her to enter into a bond with two sureties that he or she will not prefer his or her own debt to those of other creditors.

Letter of Administration
Letter of administration: Upon the death of a person intestate, or leaving a will without appointing executors, or when the executors appointed by the will cannot or will not act, the Probate Division of the High Court of Justice or the local District Probate Registry will appoint an administrator who performs similar duties to an executor. The court does this by granting letters of administration to the person so entitled. Grants of administration may be either general or limited. A general grant occurs where the deceased has died intestate. The order in which the court will make general grants of letters follows the sequence:

1. The surviving spouse, or civil partner, as the case may be;

2. The next of kin;

3. The Crown;

4. A creditor;

5. A stranger.

Where, under the rules for distribution of estates without a will (the Intestacy Rules), a child under 18 would inherit or a life interest would arise, then the Court or District Probate Registry would normally appoint a minimum of two administrators. On some estates, even under an intestacy, it is not clear who are the next-of-kin, and probate research may be required to find the entitled beneficiaries.

Letters of administration
The more important cases of grants of special letters of administration include the following: Administration cum testamento annexo, where the deceased has left a will but has appointed no executor to it, or the executor appointed has died or refuses to act. In this case the court will make the grant to the person, usually the residuary legatee, with the largest beneficial interest in the estate.

Administration de bonis non administratis occurs in two cases:

1. Where the executor dies intestate after probate without having completely administered the estate

2. Where an administrator dies.

In the first case the principle of administration cum testamento is followed, in the second that of general grants in the selection of the person to whom letters are granted.

* Administration durante minore aetate, when the executor or the person entitled to the general grant is under age.

* Administration durante absentia, when the executor or administrator is out of the jurisdiction for more than a year.

* Administration pendente lite, where there is a dispute as to the person entitled to probate or a general grant of letters the court appoints an administrator till the question has been decided.

Probate
Probate is the legal process of settling the estate of a deceased person, specifically resolving all claims and distributing the decedent's property under the valid will. Probate is a service that a Surrogate Court provides to confirm the validity of a deceased person's will. Once a will has been probated by the court, everyone can rely on its authenticity. Probate protects the instructions of the deceased, confirms the executor as the Personal representative of the estate, protects the interests of family members who may have claims against the estate, and protects the executor against claims and law suits.

Estate Planning
Estate planning is the process of accumulating and disposing of an estate to maximize the goals of the estate owner. The various goals of estate planning include making sure the greatest amount of the estate passes to the estate owner's intended beneficiaries, often including paying the least amount of taxes and avoiding or minimizing probate court involvement. Additional goals typically include providing for and designating guardians for minor children and planning for incapacity.

Estate planning tools
The tools involved in estate planning include the will, various types of trusts, beneficiary designations, powers of appointment, various forms of property ownership (Joint tenancy with rights of survivorship, tenancy in common, tenancy by the entirety, etc), gifting, and powers of attorney, specifically the durable financial power of attorney and the durable medical power of attorney. After widespread litigation and media coverage surrounding the Terri Schiavo case, virtually all estate planning attorneys now advise their clients to also create a living will. Note that many people (and even some attorneys) confuse a living will with a durable medical power of attorney. The former controls solely those decisions that must be made at the end of the patient's life, while the latter is used to give decision-making authority to someone else (usually a family member or close friend). This person, the attorney-in-fact, then makes all medical decisions leading up to the person's death, but has no such power to make end of life decisions for the patient. Those decisions are made by the patient in the living will; in the absence of a living will, and where the patient is incapable of making end-of-life decisions for him or herself, such choices are left to family members.

Estate Taxes
The estate tax in the United States is a tax imposed on the transfer of the "taxable estate" of a deceased person, whether such property is transferred via a will or according to the state laws of intestacy. The estate tax is one part of the Unified Gift and Estate Tax system in the United States. The other part of the system, the gift tax, imposes a tax on transfers of property during a person's life; the gift tax prevents avoidance of the estate tax should a person want to give away his/her estate just before dying. In addition to the federal government, many states also impose an estate tax, with the state version called either an estate tax or an inheritance tax. Since the 1990s, the term "death tax" has been widely used by those who want to eliminate the estate tax, because the terminology used in discussing a political issue can affect popular opinion.[1] If an asset is left to a spouse or a charitable organization, the tax usually does not apply. The tax is imposed on other transfers of property made as an incident of the death of the owner, such as a transfer of property from an intestate estate or trust, or the payment of certain life insurance benefits or financial account sums to beneficiaries.

Federal estate tax
The Federal estate tax is imposed "on the transfer of the taxable estate of every decedent who is citizen or resident of the United States." The starting point in the calculation is the "gross estate." Certain deductions (subtractions) from the "gross estate" amount are allowed in arriving at a smaller amount called the "taxable estate."

Inheritance tax at the state level
Many U.S. states also impose their own estate or inheritance taxes (see Ohio estate tax for an example). Some states "piggyback" on the federal estate tax law in regard to estates subject to tax (i.e., if the estate is exempt from federal taxation, it is also exempt from state taxation). Some states' estate taxes, however, operate independently of federal law, so it is possible for an estate to be subject to state tax while exempt from federal tax.

Tax avoidance
Estate tax rates and complexity have driven a vast array of support services to assist clients with a perceived eligibility for the estate tax to develop tax avoidance techniques. Many insurance companies maintain a network of life insurance agents, all providing financial planning services, guided to avoid paying estate taxes. Brokerage and financial planning firms also use estate planning, including estate tax avoidance, as a marketing technique. Many law firms also specialize in estate planning, tax avoidance, and minimization of estate taxes. The first technique many use is to combine the tax exemption limits for a husband and wife either through a will or create a living trust. Many, but not all, other techniques do not really avoid the estate tax, rather they provide an efficient and leveraged way to have liquidity to pay for the tax at the time of death. It is very important for those whose primary wealth is in a business they own, or real estate, or stocks, to seek professional advice or they may run the risk of the estate tax forcing their heirs to sell these things at an inopportune time. In one popular scheme, an irrevocable life insurance trust, the parents give their kids (within the allowed yearly gift tax limit) money to buy life insurance on the parents in an irrevocable life insurance trust. Structured in this way, life insurance is free of estate tax. However, if the parents have a very high net worth and the life insurance policy would be inadequate in size due to the limits in premiums, a charitable remainder trust may be used. This is where a large asset is flagged to be donated to a charity, sold, and invested. The investment income buys life insurance but the principal goes to the charity when the parents die. Meanwhile the children get the full amount as well in life insurance proceeds. This is a large reason for many charitable gifts, and proponents of the estate tax argue the tax should be maintained to encourage this form of charity.

"We file estate tax returns with the IRS, provide tax analysis, advice and processing
of estate taxes, gifts or inheritance taxes."

Our Focus is estate tax expertise to Attorneys, Executors, U.S citizens, estates and small businesses, and to resident and non-resident aliens with U.S. tax exposure. We provide our services locally in the Orange County California area.

About Orange County

ORANGE COUNTY
Cities and Zipcodes of customers we have:

Anaheim 92801, 92802, 92803, 92804, 92805, 92806, 92807, 92808, 92809, 92812, 92814, 92815, 92816, 92817, 92825, 92850, 92899, Brea 92821, 92822, 92823, Buena Park 90620, 90621, 90622, 90623, 90624, Costa Mesa 92626, 92627, 92628, Cypress 90630, Fountain Valley 92708, 92728, Fullerton 92831, 92832, 92833, 92834, 92835, 92836, 92837, 92838, Garden Grove 92840, 92841, 92842, 92843, 92844, 92845, 92846, Huntington Beach 92605, 92615, 92646, 92647, 92648, 92649, La Habra 90631, 90632, 90633, La Palma 90623, Los Alamitos 90720, 90721, Orange 92856, 92857, 92859, 92861, 92862, 92863, 92864, 92865, 92866, 92867, 92868, 92869, Placentia 92870, 92871, Santa Ana 92701, 92702, 92703, 92704, 92705, 92706, 92707, 92708, 92711, 92712, 92725, 92728, 92735, 92799, Seal Beach 90740, Stanton 90680, Tusin 92780, 92781, 92782, Villa Park 92861, 92867, Westminister 92683, 92684, 92685, Yorba Linda 92885, 92886, 92887Aliso Viejo 92653, 92656, 92698, Dana Point 92624, 92629, Laguna Hills 92637, 92653, 92654, 92656, Laguna Niguel 92607, 92677, Laguna Woods 92653, 92654, Lake Forest 92609, 92630, Mission Viejo 92675, 92690, 92691, 92692, 92694, Newport Beach 92657, 92658, 92659, 92660, 92661, 92662, 92663, Rancho Santa Margarita 92688, San Clemente 92672, 92673, 92674, San Juan Capistrano 92675, 92690, 92691, 92692, 92693, 92694 Ladera Ranch 92694, Coto De Caza 92679 Anaheim Hills 92807, 92808, 92809, 92817 Dove Canyon 92679

 

 

City of Aliso Viejo, 92653, 92656, 92698 City of Anaheim, 92801, 92802, 92803, 92804, 92805, 92806, 92807, 92808, 92809, 92812, 92814, 92815, 92816, 92817, 92825, 92850, 92899 City of Brea, 92821, 92822, 92823 City of Buena Park, 90620, 90621, 90622, 90623, 90624 City of Costa Mesa, 92626, 92627, 92628 City of Cypress, 90630 City of Dana Point, 92624, 92629 City of Fountain Valley, 92708, 92728 City of Fullerton, 92831, 92832, 92833, 92834, 92835, 92836, 92837, 92838 City of Garden Grove, 92840, 92841, 92842, 92843, 92844, 92845, 92846 City of Huntington Beach, 92605, 92615, 92646, 92647, 92648, 92649 City of Irvine, 92602, 92603, 92604, 92606, 92612, 92614, 92616, 92618, 92619, 92620, 92623, 92650, 92697, 92709, 92710 City of La Habra, 90631, 90632, 90633 City of La Palma, 90623 City of Laguna Beach, 92607, 92637, 92651, 92652, 92653, 92654, 92656, 92677, 92698 City of Laguna Hills, 92637, 92653, 92654, 92656 City of Laguna Niguel, 92607, 92677

City of Laguna Woods, 92653, 92654 City of Lake Forest, 92609, 92630, 92610 City of Los Alamitos, 90720, 90721 City of Mission Viejo, 92675, 92690, 92691, 92692, 92694 City of Newport Beach, 92657, 92658, 92659, 92660, 92661, 92662, 92663 City of Orange, 92856, 92857, 92859, 92861, 92862, 92863, 92864, 92865, 92866, 92867, 92868, 92869 City of Placentia, 92870, 92871 City of Rancho Santa Margarita, 92688, 92679 City of San Clemente, 92672, 92673, 92674 City of San Juan Capistrano, 92675, 92690, 92691, 92692, 92693, 92694 City of Santa Ana, 92701, 92702, 92703, 92704, 92705, 92706, 92707, 92708, 92711, 92712, 92725, 92728, 92735, 92799 City of Seal Beach, 90740 City of Stanton, 90680 City of Tustin, 92780, 92781, 92782 City of Villa Park, 92861, 92867 City of Westminster, 92683, 92684, 92685 City of Yorba Linda, 92885, 92886, 92887

Noteworthy communities Some of the communities that exist within city limits are listed below: * Anaheim Hills, Anaheim * Balboa Island, Newport Beach * Corona del Mar, Newport Beach * Crystal Cove / Pelican Hill, Newport Beach * Capistrano Beach, Dana Point * El Modena, Orange * French Park, Santa Ana * Floral Park, Santa Ana * Foothill Ranch, Lake Forest * Monarch Beach, Dana Point * Nellie Gail, Laguna Hills * Northwood, Irvine * Woodbridge, Irvine * Newport Coast, Newport Beach * Olive, Orange * Portola Hills, Lake Forest * San Joaquin Hills, Laguna Niguel * San Joaquin Hills, Newport Beach * Santa Ana Heights, Newport Beach * Tustin Ranch, Tustin * Talega, San Clemente * West Garden Grove, Garden Grove * Yorba Hills, Yorba Linda * Mesa Verde, Costa Mesa Unincorporated communities These communities are outside of the city limits in unincorporated county territory: * Coto de Caza * El Modena * Ladera Ranch * Las Flores * Midway City * Orange Park Acres * Rossmoor * Silverado Canyon * Sunset Beach * Surfside * Trabuco Canyon * Tustin Foothills Adjacent counties to Orange County Are: * Los Angeles County, California - north, west * San Bernardino County, California - northeast * Riverside County, California - east * San Diego County, California - southeast