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What is a Beneficiary to an Estate?

What is a Beneficiary to an Estate?

When someone creates an estate plan, they are preparing for what happens to their assets after they die. In doing so, they create a will or trust to ensure these assets end up in the hands of their choosing. This allows an individual to distribute their cherished possessions and belongings to beneficiaries. A beneficiary is a person or entity that inherits a deceased individual’s assets. When an estate goes through probate, beneficiaries often find it important to enlist the help of an attorney to guide them through the process and protect their rights.

Minor Beneficiaries

When people leave behind certain assets, they sometimes leave them to younger children to have when they get older. If a beneficiary is a minor, they may have a Guardian appointed to oversee their asset(s) until they are 18 years old. In some cases, this is stated in the will or trust, while other times an individual passes away without an estate plan. Situations such as these can be difficult to navigate, which is why it is important to have an experienced attorney to help beneficiaries during this time.

Tax Obligations

In the state of New York, there is no inheritance tax on beneficiaries. However, there may be tax obligations that still impact an estate or a person’s inheritance, such as an estate tax. As of December 2018, the state set a $5.25 million estate tax exception. This means if the deceased’s estate exceeds this amount, it must file a New York estate tax return. This must be filed within nine months of the individual’s death. The highest tax rate a beneficiary may receive is 16%.

A federal estate tax is also required to be paid if an individual estate is worth more than $11,180,000. This must also be paid within nine months of the deceased’s death. The federal and NYS governments also require a final individual state and federal income tax return to either be filed by tax day or the year after the deceased’s passing. In addition to this, a federal estate/trust income tax return must be taken care of within the same time limit.

Disputes/Contests

After an individual passes, their will must go through probate. This is to determine if a will is valid. In some cases, a beneficiary may be suspicious of a will’s content and believe it did not go through the proper legal process. In the event of this, a beneficiary may wish to contest a will if they believe the following:

  • The deceased did not sign their will
  • There were no witnesses present to the signing
  • The deceased was coerced into signing their will

Contact our Firm

If you are a beneficiary to an estate and wish to seek more information about your rights, contact The Lauterbach Law Firm today.

The Lauterbach Law Firm is proud to serve clients throughout Rockland County who are faced with legal matters related to estate planning, real estate, foreclosure defense, landlord-tenant law, business law, and criminal defense. If you require the services of an experienced team of attorneys, contact The Lauterbach Law Firm today to schedule a consultation.

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