What Is a Decedent?

"Decedent" is a legal term used in tax and estate planning to refer to a deceased person. 

The possessions of an individual become part of their estate when that individual dies. And, thenceforth, they are referred to as a decedent or the deceased. The final transactions and disposition of the decedent's estate are defined by their last will and testament, living trust, or the laws for intestate succession in their state.

Estate and Tax Implications for a Decedent

Assuming that they had an estate plan, an individual's will and/or living trust remains after they die to provide directions for the handling o𒉰f their money and other assets.

The legal process of executing a will or trust always involves reference to the deceased as a decedent. Attorneys, executors, and trustees execute the terms set out in decedents' wills and/or trusts.

ꦑ A last will and testament is a written document ꦿthat details who a decedent decided should receive items of property from the estate. Its execution is managed by an executor or personal representative named in the document.

A living trust is a separate legal entity. While living, an individual legally transfers ownership of their assets into the name of the trust. The trust's named trustee (or successor trustee) ultimately distributes them to the designated beneficiaries at some point after the individual's death.

A trust establishes a 澳洲幸运5开奖号码历史查询:fiduciary duty for its trustee, who is legally responsible for making decisions in the best interests of the 澳洲幸运5开奖号码历史查询:beneficiaries identified in the trust documents.

Estate Taxes

A decedent may owe state or federal estate taxes. The trustee is responsible🍃 on behalf of an estate for filing an estate tax return if required and a final personal tax return, as well as paying any taxes owed.

It's unlikely that most people will owe estate taxes for tax year 2025. The federal estate tax exemption is $13.99 million for the year. It increased from $13.61 million in 2024 because it's indexed to keep pace with inflation.

State tax exemptions either match the federal level or vary depending on the state the decedent resided in at the time of their death. In addition, not all states impose estate taxes.

Inheritance Taxes

The federal government doesn't impose an inheritance tax but five states did so as of tax year 2025:

• Kentucky
• Maryland
• Nebraska
• New Jersey
• Pennsylvania

Maryland also has an estate tax. It's the only estate to impose both taxes.

A decedent's estate is not responsible for paying the inheritance tax. The recipient of a bequest must pay it.

Those who are closely related to the decedent, such as a spouse, parent, child, or sibling, pay a lesser tax rate and may even owe nothing. Those who aren't related to the decedent typically pay the highest rate.

Example

An individual creates an estate for their 🌠family through years of working and acquiring i🐻ncome and assets.

The individual passes away. They are referred to as the deced🐬ent by their tax and estate lawyers. They have left life insurance, ♛$15,000 in a checking account, a home, a retirement fund, and a taxable brokerage account.

The decedent's debts owed as of the date of death are paid from the estate, along with costs associated with closing the estate, any taxes owed on the decedent's final tax return, and estate taxes that may be due.

The decedent designated a beneficiary for their life insurance policy. Those policy funds are paid out directly to that beneficiary. The policy doesn't become part of the decedent's estate and avoids probate.

The same goes for the funds in the retirement, brokerage, and savings accounts, if the decedent, while living, designated beneficiaries for them in the records of the relevant financial institutions. Beneficiaries may contact the firms directly to arrange for the distribution of those assets.

The Bottom Line

"Decedent" is the legal term used in tax and estate planning to refer to a deceased person. Decedents may have financial obligations after their deaths. Attorneys, executors, or trustees are responsible for meeting those obligations and carrying out decedents' wishes as outlined in their wills and/or trusts.