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A TSP is an asset of the Estate. Likewise, if there is no will, and a probate is filed, the TSP must be listed. Further, moneys from this acount can be used to pay bills such as a mortgage or medical bills. As for tax consequences, any tax consequences are as a result of the total value of the Estate and not the TSP alone. And if the total value of the Estate does not exceed 5 million, there are no federal taxes owing. But, if the estate has to be probated, there will be probate/attorney fees.
If bills are being paid out of the tsp account will the final tax bill of the decedent be hit with a large tax percentage because all the money in the tsp account are taxable. The estate is small, but if any amount in the tsp is left over can the retirement status of the account be preserved?
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