Knowing how the word is used in legal documents and court proceedings can help you better understand the estate distribution process.
Alternate name: Deceased
When someone dies, there are many financial issues that must be sorted out in relation to their estate. Ideally, the decedent will have named an executor prior to their death, who is responsible for filing taxes, paying off outstanding debts, and distributing any remaining assets. For example, say your spouse died. In legal documents, such as regarding estate matters, your spouse would be called the decedent, while you would be referred to as the surviving spouse.
How a Decedent Works
Legal professionals use the specialized word “decedent” in connection with several financial and legal actions that must be executed after a person passes away.
Filing Federal Taxes
A tax return must be filed on behalf of a decedent to report their income, credits, and deductions. The deadline for filing their taxes is the tax deadline in the year following the decedent’s death. So if an individual died in 2022, their tax returns would be due April 15, 2023. Any outstanding tax returns for other years must also be filed for the decedent. A person’s tax obligations aren’t nullified simply because they passed away. Once the tax return is filed, the person filing may have to make a payment from the estate if there is an outstanding tax due, or they may receive a refund if applicable. Tax refunds are considered part of the decedent’s estate.
Paying Off Debt
Before any assets are distributed to the decedent’s heirs, their outstanding debts must be paid off first, assuming there is no co-signer or joint account owner. Both cash and personal property may be liquidated to pay off creditors.
Distributing Estate Assets
When a decedent has a will, the executor is tasked with distributing those assets to the beneficiaries. However, the process must be overseen by a probate court, which can slow down the distribution of the assets and add legal fees that detract from the value of the estate. If the decedent did not create a will, then state law determines who inherits the estate. In most states, it is a spouse, children, or other close relative. Probate can be avoided in a couple of different ways. The first way is if the decedent created a living trust before their death. However, any type of bank account or life insurance policy that requires a beneficiary to be named can be honored without a will. So if the decedent named beneficiaries on their financial accounts, those heirs could receive their inheritance without going through probate.
Decedent vs. Deceased
Both “decedent” and “deceased” are used to refer to someone who has passed away. “Decedent” is typically used in legal terms. “Deceased” is often used when talking about the victim of a homicide. Essentially, both words have the same meanings but are used in different situations. Want to read more content like this? Sign up for The Balance’s newsletter for daily insights, analysis, and financial tips, all delivered straight to your inbox every morning!
