Who Is a Decedent?
A decedent is a legal term used by professionals in the tax, estate planning and law fields for a deceased person. When a decedent is a legitimate taxpayer, all of their possessions become part of their estate, and they are denoted as a decedent, or deceased. Decedents have legal power over final transactions and other estate preparations if they made the legal preparations before their death.
Executing the Will and Trust of a Decedent
From a financial perspective, a decedent does not cease to exist after they die because almost everyone leaves behind assets. Attorneys and trustees carry out a decedent's wishes after their deaths by executing what is in their wills and trusts. Decedents are also required to file a final tax return for the year of their death, and the estate must pay any outstanding taxes.
- Decedent is a legal term used to refer to a deceased person.
- Decedents have financial obligations, even after their death, such as the filing of taxes.
- Attorneys and trustees are responsible for carrying out a decedent's wishes as outlined in their wills and trusts.
- Creating trusts to protect assets is a good practice for everyone.
When a person dies, they become a decedent, and their will and trust remain in order to give directions for handling their money and other assets. The legal process of executing a will or trust always refers to the deceased as a decedent and requires filing a final tax return that lists the entire estate.
Establishing a trust prior to death is important because it allows a person to transfer the legal rights of his assets to another person before he dies. This process often reduces estate taxes. In addition, it grants the trustee—the person acting on behalf of the decedent—the immediate authority to distribute assets upon death. Finally, without any courts involved the estate does not have to pay any court fees.
Protecting and Distributing a Decedent's Assets
Many financial advisors recommend that their clients create a trust to protect their assets. When a trust is created, the trustor transfers legal ownership of his assets to a person or institute named as the trustee. It is the trustee's job to manage the assets on behalf of any beneficiaries named in the trust.
The creation of a trust establishes a fiduciary duty for the trustee. This means that the trustee is legally responsible to make decisions in the best interests of the beneficiaries outlined in the trust. This is meant to provide peace of mind for a decedent that their assets are allocated correctly. The beneficiaries of the trust receive some or all of the benefits in the trust when the trustor becomes a decedent upon their death.
Example of a Decedent
George created an estate for his family after retirement. After his death, George became a decendent. The trustees specified in his estate were responsible for filing his final tax return, as well as making sure that his wishes specified in his estate were carried out.