What Is a Decedent? Definition and Legal Rights – NerdWallet

Decedent is a legal term for a person who has died. It often refers to a deceased person whose estate (all of the assets they owned) is being settled during probate. Via a will or trust, a decedent can control where their assets go after they die ^[0]

.

A decedent has certain legal and financial obligations, including distributing their assets and paying outstanding taxes or debts. Because they’re no longer alive to carry out these duties, an executor or trustee has to handle those responsibilities as their representative.

If the decedent didn’t create a will — called “dying intestate” — a state probate court may distribute their assets according to state laws.

The main difference between a decedent and a deceased person is whether the term has legal connotations. Both terms refer to a person who has died, but the word “decedent” is often used in legal documents and scenarios related to a person’s estate ^[0]

.

A decedent has certain legal rights and responsibilities after death; “deceased” doesn’t carry these connotations. People often use the term “decedent” in situations where someone else has to represent a deceased person legally, such as in court.

• Property, including real estate.

• Personal property, including vehicles, jewelry and family heirlooms.

• Financial accounts, though some accounts, such as life insurance, may transfer directly to a beneficiary without going through probate.

Decedents also have certain legal responsibilities that a representative, usually the executor of their will or the trustee of their trust, must carry out during the probate process ^[0]

• Paying any outstanding debts out of the estate before assets can transfer to beneficiaries.

• Notifying important institutions of the death, including banks, creditors and government agencies such as the IRS and the Social Security Administration.

• Filing the person’s final tax return with the IRS.

• Paying estate taxes if the estate’s size exceeds the federal or state estate tax limit.

Tax implications for a decedent

A decedent may owe federal or state estate taxes, depending on the value of their assets and the state they lived in. The federal estate tax ranges from rates of 18% to 40% and generally only applies to assets over $12.06 million in 2022 or $12.92 million in 2023.

As mentioned, the decedent’s representative ensures that estate taxes are paid out of the estate’s accounts before assets transfer to beneficiaries. They’ll also file the decedent’s final tax return to report any final earned income.

A decedent trust is the “part A” of an AB trust (also called a bypass trust or credit shelter trust), which is a type of trust a married couple creates to reduce estate taxes or to ensure that children from previous relationships inherit certain assets.

When the first spouse (the decedent) dies, their estate transfers into a trust that pays income to the surviving spouse. When the surviving spouse dies, the remaining assets “bypass” the surviving spouse’s estate and transfer to previously designated beneficiaries tax-free.