The property subject to being taxed is known as the taxable estate. This is not the same as the probate estate or the estate provided in a will. For example, any property placed in a trust which states that you will receive the income during your lifetime and, upon your death, the principal goes to your children is not in your probate estate.

A will does not control who receives what,and yet it is in your taxable estate because you received the income from it and you were the trust’s creator. Typically, any property that you once owned and now receive the income from, or any property in which you controlled or retained the right to say who will receive what is in your taxable estate. For instance, life insurance is, more often than not, in your taxable estate because you retained the right to designate beneficiaries, even though you may never see any of the insurance money.

If you would like more information regarding asset protection, trusts, family limited partnerships or the subject of this article please call or email our office.