Laws on Estates With Beneficiaries
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Estate taxes in the U.S. only apply to those estates which have gross values in the millions of dollars.
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Laws on estates with beneficiaries vary little from those laws governing estates where no one stands to inherit. The Probate Court oversees the distribution of assets as per the final request of the deceased but not before settling any outstanding debts that the deceased incurred in life. The settling of these debts may mean beneficiaries receive far less than what is mentioned in the will.
Debts of the Deceased
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Just because you are named as a beneficiary to an estate does not make you liable for any debts incurred by the deceased. Gifts and payments made to you with the intention of avoiding debt, however may be subject to investigation by creditors when the will is probated according to the Uniform Probate Code. This may mean that gifts of property or money given to you by the deceased with the purpose of avoiding legitimate debts may be seized or sold to pay those debts on the order of the Probate Court.
Witnesses to the Will
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In most states if you are named as a beneficiary in a person's will you may not serve as a witness to the authenticity of the document when it is created. This is to avoid a conflict of interest or the appearance of any impropriety on your part with regard to the decedent's finances or property. If the Probate Court discovers that you are both witness and beneficiary it could invalidate the will document and distribute assets as though no will existed.
Property Out of the Country
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If someone leaves you property in another country, that property is bound by the laws and taxes of that foreign country and not the United States according to the U.S. State Department. This means any real property must pass through the foreign government's inheritance process before you can claim it. This may mean that if the deceased had any outstanding debt payable to that country's government you might be receiving a check for the remainder of the property after it has been sold to pay those debts.
Verification of Identity
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If you are named as a beneficiary in a will your identity must be confirmed by the executor of the will document working for the Probate Court in the state the deceased resided in. Proof of identity can be as simple as presenting acceptable government issued forms of identification or birth certificate.
Estate Tax
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The estate tax is a federally mandated deduction based on the total gross value of an estate before any beneficiaries have received property or financial amounts from a will. According to the Internal Revenue Service, most simple estates do not require an estate tax. As of 2009 this tax is only required if the total gross value of the estate after taxable deductions is greater than $3.5 million.
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