This video:https://www.youtube.com/watch?v=liPJEI3To84 gives a broad overview of

Question

This video:https://www.youtube.com/watch?v=liPJEI3To84

gives a broad overview of Gift and Estate Taxes. Consider: How are gift taxes and estate taxes inter-related in terms of a lifetime exclusion amount? What is the gross estate? What items are deducted from the gross estate to arrive at the net estate (the amount that is subject to tax)? Note that the video references a probate estate; we will discuss this further but there is an important distinction between the probate estate and the gross estate.

Explanation / Answer

The lifetime exclusion amount under gift taxes is the amount any person can gift to any number of people during his entire lifetime that will be free from gift taxes. on the other hand this amount will reduce the amount of estate tax exemption. This way gift taxes and estate taxes are inter related.

Gross estate is the market value of all the property and assets belonging to the decedent or his/her interest in any property at the time of death.

Net estate value is arrived at after deducting outstanding debts, funeral expenses, taxes and other administrative cost from Gross estate.

Probate estate is the assets in the sole name of the decedent without any beneficiary designated. It get distributed to beneficiaries though a WILL.

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