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Cheat Sheet

Estate & Trust Administration For Dummies

From Estate and Trust Administration For Dummies, 2nd Edition by Margaret Atkins Munro, Kathryn A. Murphy

As the fiduciary of an estate or trust, you have many duties, beginning immediately upon the decedent’s (deceased person’s) passing. You’re also guaranteed to become intimately familiar with a host of tax forms you may not have known existed.

Tax Forms to Know as the Fiduciary of an Estate or Trust

When you’re administering an estate or trust, you may have to prepare a seemingly endless array of tax returns. The following table lists some of the most popular ones. Check with your accountant or attorney if you have any questions.

Federal Tax Form Number and Name When It’s Required When It’s Due
Form 1040
U.S. Individual Income Tax Return
When the decedent had income prior to death that hasn’t been reported. April 15 following the year of death; automatic 6-month extension of time to file provided Form 4868 is filed on or before April 15. Form 4868 doesn’t need to be filed if no tax is due; the extension is automatic.
Form 1041
U.S. Income Tax Return for Estates and Trusts
When the estate or trust receives income earned. 3-1/2 months after the year-end of the estate or trust; most trusts are required to use a December 31 year end, but estates may elect a fiscal year, provided the first fiscal year ends no later than 11 full months after the date of death.
Form 706
United States Estate (and Generation-Skipping Transfer) Tax Return
For estates with assets more than a certain amount. Even though not every estate with assets over that amount will have an estate tax, those estates are still required to file. 9 months after date of death; due date may be extended by 6 additional months for cause.
Form 709
United States Gift (and Generation-Skipping Transfer) Tax Return
Generally, if the decedent gave gifts to someone (other than his or her spouse) totaling more than $14,000 in calendar year 2013, or if the decedent was splitting gifts with a surviving spouse who made the gifts, and the gifts haven’t yet been reported. April 15 of the year following the year the gift was made. Automatic 6-month extension of time to file provided Form 4868 is filed on or before April 15 for taxpayer’s Form 1040.
Form 1310
Statement of Person Claiming Refund Due a Deceased Person
If a tax refund is due a decedent on his or her Form 1040 (whether final or any prior year), but he or she has no surviving spouse or court-appointed representative, the person requesting the refund must complete and file Form 1310. File together with the related tax return. If claiming a refund for a prior year for which a tax return has already been filed, send as soon as possible to the IRS Service Center where the original return was filed.
Form SS-4
Application for Employer Identification Number
For any trust or estate that will maintain bank or brokerage accounts, or to whom anyone who makes a payment may be required to issue either a Form 1099 or a Form W-2. Immediate prior to opening any accounts for estate or trust. You can apply online at www.irs.gov.
Form 1099-MISC To report payments in any amount to attorneys, or of $600 or more to accountants, trustees, or any non-corporate entity to whom the estate or trust paid compensation. Send copy to recipient no later than January 31 of the year following the tax year involved. Copy should be filed with the IRS by February 28 (if filing on paper, and accompanied by Form 1096), or by March 31 if filing electronically.

What to Do When Someone Dies

If you’re an executor, personal representative, or administrator of an estate, your job begins at the death of the person whose estate you’re administering. The following list contains tasks you need to take care of in the first days and weeks after the decedent’s death.

  • Determine the decedent’s wishes regarding arrangements such as funeral and burial.

  • Obtain copies of the death certificate.

  • Ascertain whether the decedent had a last will and other estate-planning documents and then try to find them.

  • Apply for a federal Taxpayer Identification Number for the estate, using Form SS-4. (This is like a Social Security number for the estate.)

  • Figure out the decedent’s domicile (where he or she “lived” for probate and tax purposes) and where real property (real estate) is located, because the executor may have to probate the estate in multiple jurisdictions.

  • Determine whether you need professional advisors such as an attorney, CPA, or enrolled agent.

  • If the decedent has no surviving spouse:

    • Change the locks on the decedent’s residence immediately.

    • Locate and take possession of decedent’s checkbook and credit cards and notify banks and credit card companies of the decedent’s passing.

    • Notify the decedent’s homeowner’s insurance company and automobile insurance company. Add executor, when appointed, as insured and determine whether coverage, particularly on items of unusual value, is adequate.

  • Cancel pending contracts (such as purchase and sale agreements on real estate) and rewrite as executor.

  • Marshall and safeguard the decedent’s assets by

    • Locating the safe-deposit box and inventorying its contents

    • Collecting information regarding the type, value, and manner of holding for all the decedent’s assets

  • Determine heirs at law (those who would inherit if the decedent was will-less) and beneficiaries (those who inherit in the presence of a will) of the decedent’s estate.

  • Decide whether probate of the decedent’s will (or administration of the decedent’s estate) is necessary and file the decedent’s last will with the probate court.

  • If probate is necessary:

    • Figure out whether ancillary, or supplemental, probate is also necessary (for real property in another state).

    • Decide whether temporary administration of the estate is necessary for assets that must be dealt with immediately.

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