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Author: 2gifts Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 4285  
Subject: Re: POD accounts and fed estate tax Date: 1/22/2014 2:41 PM
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An item that is not part of the PROBATE estate may well be (and often is) part of the TAXABLE estate.

And as we found out, the probate estate can then be completely used up to pay for the estate taxes while the POD accounts still go to the beneficiary. This can effectively cause the heirs supposedly getting the probated estate to get nothing with the heirs getting the POD assets still getting their share.

Yes, we know that POD accounts can be used to pay the taxes, but the executor has to drive all of that, and if the executor or someone they care about is the POD heir, they may be more than willing to stick the other heirs under probate with the entire bill and no residual value.

And as long as I'm talking about consequences of planning, sometimes completely unintended, don't forget that the insurance money belongs to the named beneficiary, who does not have to use those proceeds to pay for anything relative to the decedent or estate, such as final expenses, even though that may have been the wish of the deceased. It is perfectly legal for the insurance beneficiary to keep those proceeds and have the estate pay for the final expenses. Once again, you need to think all of these things through.

And yes, I will be very happy when DH gets those estates settled, especially as there's nothing in there for him other than work and stress.
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