How are assets of a deceased person distributed and what about taxes on that property?

When a person dies how is the estate distributed and settled and what are the taxes:



In Florida there are no inheritance taxes. Further if the total estate is less than $5,250,000 there will be no federal estate taxes.

When a person dies and he/she has a Living Trust or a Last Will & Testament, how are the assets distributed? That depends on what the instrument, the Trust or Will says. If the instrument directs the distribution of specific property then those instructions are followed. However, if the instrument says, as most do, to divide into shares or percentages then the property can be distributed in kind (that is, the property is re-titled in the names of the beneficiaries according to their percentage or interest and the property is then owned in jointly by the beneficiaries) or the property is sold and the proceeds distributed. On the other hand, the properties could be appraised and the beneficiaries could receive properties of equal value.

How are properties of a deceased person valued for purposes of sale or distribution? Properties need to be valued by an appropriate appraiser. Real estate should be valued by a licensed real estate appraiser. Personal property should also be appraised by a licensed appraiser but this may require the services of more than one person as jewelry may be involved as well as furs, paintings or valuable furnishings, including antiques.

Other than for distribution purposes and valuing an article to be distributed to a beneficiary, are there any other benefits to an appraisal? Yes. Whenever a piece of personal or real property is sold federal income taxes are payable on the gain. Gain is normally measured as the difference between what it cost and what it sold for. However, if an article or piece of property is inherited, you no longer use the cost of the article, but rather, what was its value at the time of the death of the decedent who transferred the property and subtract that value from what it sold for. Many times if property is sold close to the date of death there will be no gain and thus, no taxes.