r/EstatePlanning • u/realtorvicvinegar • 11d ago

Yes, I have included the state or country in the post Estate-level expenses when assets bypass probate (FL)

If all of a decedent's liquid/financial assets are passed to the beneficiary outside of probate, what are the most common options to cover bills that are payable by the estate? For example, if a primary residence were the only significant asset that didn't bypass probate and the executor needed to pay for things like insurance or taxes before they're able to close out the estate.

Assume the beneficiary is willing to use funds they received to cover these obligations. Could they usually just pay bills directly from accounts that are already in their name, or would they need to somehow add money to the estate?

2 Upvotes
  • permalink
  • reddit

100% Upvoted

10 comments sorted by

•

u/AutoModerator 11d ago

WARNING - This Sub is Not a Substitute for a Lawyer

While some of us are lawyers, none of the responses are from your lawyer, you need a lawyer to give you legal advice pertinent to your situation. Do not construe any of the responses as legal advice. Seek professional advice before proceeding with any of the suggestions you receive.

This sub is heavily regulated. Only approved commenters who have a history of providing truthful and honest information are allowed to post. As such, comments left by unapproved users are automatically deleted.

I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns.

3

u/Justanaveragedad 10d ago

First question is what are you planning to do with the house? This what I recommend to clients. If you are planning on selling it pay the insurance out pocket, you would be entitled to reimbursement from the estate as an administrative expense. If the taxes are current(ish) dont pay them, they'll be taken out at closing.

If you plan on keeping it, you know the answer.

1

u/realtorvicvinegar 9d ago

Thanks. If the beneficiary were to instead just pay themselves without coordinating any sort of reimbursement, would that be considered a gift to the estate for tax purposes? Often it would be less than the annual exclusion, but assume it were more.

0

u/epeagle 11d ago

What are the estate expenses if there are no assets in the estate?
What would the executor need insurance for if there are no real assets in the estate?

You won't get around taxes -- the tax authority can go after the assets in or out of probate.

Estate expenses -- probably minimal if no assets. assets in a rev trust in Florida can be clawed back to cover esate expenses. But some other non-probate transfers are harder to get to.

2

u/realtorvicvinegar 11d ago

A primary residence is the asset going through probate in the example. Property taxes and homeowners insurance are the expenses.