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What Is Taxable in My Estate?

In a word, everything. This includes stocks, bonds, real estate, business interests, cash as well as:

  1. The share of any jointly-owned property and accounts. If the other co-owner is your spouse, the law presumes that 50% of the property belongs to you, and it is included in your gross taxable estate. Otherwise, the law presumes that 100% of the property is owned solely by you unless the other co-owner can prove his or her actual contribution to that account or property.
  2. Qualified retirement plan accounts such as 401(k)s and profit-sharing plans. However, some plan assets may be excludable; be sure to check with the plan administrator to see if the plan qualifies for exclusion. Individual Retirement Accounts (IRAs) of all varieties are also included.
  3. Life insurance proceeds. If your policy is payable to your estate, the death benefit is part of your estate, even though the beneficiary does not have to pay income tax on the proceeds. A modest estate, seemingly below the taxable minimum of $1.5 million (in 2005; $2 million in 2006-2008 and $3.5 million in 2009), can easily leap well past that point in size when insurance policy proceeds are counted. To avoid having life insurance death benefits included in your taxable estate, you can transfer ownership of the policy to another person or trust.
  4. Property held in a trust you controlled outright or had significant "strings attached." A trust must be irrevocable and not under your full control in order to save estate taxes in your estate. To remove property from your estate, you must give up control through ownership and all benefits from it. That means you give up the right to any income from it, to name or change beneficiaries, and so on.
  5. Any transfers of life insurance made within three years of death.
  6. Annuities. While the annuity may be passed to a survivor, the entire value is includible in your estate. Any gain in the annuity is taxable as ordinary income to the beneficiary.

  • Did You Know...?
    After determining your taxable estate, calculate the income from each property, or asset, in your estate in the case of three events: death, retirement, and disability. This helps determine how much security you have assured for your family. Most times, the retirement and disability columns have huge gaps.

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This material is being provided for informational purposes only. Neither New York Life nor its agents provide legal, tax or accounting advice. Please contact your own advisers for legal, tax and accounting advice.

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What Is Taxable in My Estate?

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