What Is Gross Estate

What Is Gross Estate

Gross estate is the total value in the dollar of personal property and assets when they die. The taxes and debt owed does not include in the gross estate figure. After the removal of these charges, the total number stands as the net value of the person’s estate.

The Breakdown of Gross Estate

The estate executor does the calculation of gross estate. An executor is an individual assigned to oversee the estate of a deceased individual. 

The primary duty of the executor is to bring to pass the instructions and desires of the deceased. The appointment of an executor is made if they are included on a legal last testament or will of the dead. Else the responsibility of an executor will be handled by an administrator appointed by a court.

The estate executor is giving access and calculates the total assets owned by the deceased. The following assets are considered in the estate calculation; bonds, stocks, real estate, and other investment. Personal properties such as buildings, cars, and collectibles are also calculated. The purpose of the gross estate figure is for federal income tax. The net estate value is estimated by subtracting any liabilities from the determined gross estate value. Liabilities consist of funeral expenses, outstanding debt, administrative cost, taxes among others. After this is done, the net estate is shared among the beneficiaries named in the will.

What is Gross Estate Planning?

 Gross Estate planning involves the preparation of duties used to manage the asset of a deceased.

This planning involves the gifting of asset and the payment of estate taxes. Estate plans mostly involve the aid of an attorney conversant with estate laws.

Gross Estate planning involves carving means of preserving, managing and distributing a person’s property and financial responsibilities during a period of incapacitation or death. There are varying reasons by individuals for planning an estate, and they include; meeting the needs of a surviving spouse, family wealth, children, and charitable purpose.

Two major players in Gross Estate Planning 

1.The Estate Executor 

2. The will of the Deceased

The Estate Executor

An estate executor is a person assigned to control the estate of a dead individual. He or she is assigned to calculate the gross estate of the deceased. The primary responsibility of the executor is to actualize the instructions and desires of the dead. The estate executor is assigned either by the people who make the will or by a court of law in situations where there was no appointment in the first place.

The estate executor is charged with the responsibility of ensuring that all asset in the will is duly accounted for as well as releasing these assets to the proper party or parties. These assets could include stocks, bonds, and financial holdings. The value of the estate is also estimated either with the use of the death date value or the other valuation date made available in the Internal Revenue Code.

The executor also has to ensure that all debts of the deceased are paid off. The executor is mandated to act in the interest of the dead. Almost anyone can serve as the estate executor, but it is usually a lawyer, a tax preparer, an accountant or a member of the family. The only restriction is that the appointed executor must be above 18 years of age and have no previous criminal conviction.

The Will of the Deceased

A will also know as a testament, and it is an enforceable legal declaration of how an individual wants their property and asset shared after death.

 A will is a required makeup of estate planning. A will see to it that the wishes of the person are actualized and make the situation easier for their surviving loved ones. In the condition where an individual dies without a will, the distribution of the individual’s property is left in the hands of the government and may even become the property of the state. Hence a will is necessary for estate planning

Benefit of Gross Estate Planning 

Gross Estate planning is of help to families, couples, individuals and beneficiaries circumvent complex and future tax issues during emotional times resulting from the death of a dear one. Aside from the naming of beneficiaries and determining the heirs of the deceased assets, estate planning can as well streamline financial issues that recipients are likely to deal with. Trusts, charitable giving, private foundations which are advanced estate planning tools can also be of help in calculating an individual’s gross estate, protecting estate assets and limit or remove federal estate taxes.