What Is State Inheritance or Estate Tax?
The rules for state inheritance and estate taxes vary based on the state. Check with the tax department of the decedent’s state for that state’s inheritance and estate tax requirements. [more…]
Calculate Decedent, Estate, or Trust Business Income and Capital Gains and Losses
In order to file Form 1040 or Form 1041, you will need to determine how much business income, if any, the taxpayer (whether trust, estate or decedent) earned, and calculate capital gains and losses. The [more…]
How to Complete Parts 1 and 2 of Estate Form 706
If the estate you’re administering requires a Form 706 for any reason, you must complete the first three pages, together with all the other schedules pertinent to the estate. In Part 1 of Form 706, report [more…]
What Fees Do Estate and Trust Attorneys Charge?
Estates and trust attorneys typically charge clients in one of three ways: hourly fee, flat fee, or contingency fee. In addition to the attorney’s regular fees, you should expect to be billed for miscellaneous [more…]
How to Find an Appraiser for Your Estate or Trust
As an executor or trustee, you may need an appraiser to estimate the value of the assets of the decedent’s estate. You will need to provide asset valuations on Form 706, and you will need to have official [more…]
How to Hire a Tax Professional for Your Estate or Trust
As the administrator of an estate or trust, you may find that you need a tax professional to help you handle the taxes and accounting for the decedent’s assets. You may therefore choose to hire a Certified [more…]
How to Find an Estate or Trust Attorney
When searching for an attorney to help with your estate or trust, resources worth consulting include the phone book and the Martindale-Hubbell database, which lists most lawyers in the United States. Your [more…]
How to Find Resources for Administering an Estate or Trust on Your Own
If you decide to administer an estate or trust on your own, there are important resources you should consult concerning tax issues, tax forms, probate courts, and more. Be sure to consult the necessary [more…]
What Are Qualified Subchapter S Trusts and Electing Small Business Trusts?
Qualified Subchapter S trusts and Electing Small Business trusts allow a grantor (the person who created a trust)to transfer shares he or she owns in a small business corporation into a trust. Both of [more…]
How to File for Tax-Exempt Status for Your Foundation
When creating a non-operating charitable foundation, it is essential that you establish the foundation’s tax-exempt status. The IRS must officially recognize your foundation as a qualified charity before [more…]
What Are Charitable Trusts?
In charitable trusts, a grantor (the person who creates a trust) can reduce his or her taxable estate by transferring assets out of the estate with the goal of using them for charity. Split-interest charitable [more…]
Insurance, Crummey, and Grantor-Retained Interest Trusts
Insurance trusts, Crummey trusts, and grantor-retained interest trusts can solve issues that arise with an estate. Insurance trusts ensure that an estate meets its cash needs. [more…]
What Are Grandchildren’s Trusts?
In most respects, grandchildren’s trusts are just like the type of trust a grantor might create for his or her children. One unique quality of grandchildren’s trusts is that transfers made into these trusts [more…]
What Are Credit Shelter Trusts?
The credit shelter trust is a trust that holds an amount of assets from a decedent’s estate that is equal to the portion of allowable tax-free transfer that the decedent didn’t use during his or her lifetime [more…]
What Are Marital Trusts?
Marital trusts are left by the grantor, the person who creates the trust, to his or her surviving spouse. Marital trusts are designed to minimize the taxes paid on the grantor’s postmortem estate and those [more…]
What Are Irrevocable Trusts?
Irrevocable trusts are trusts that grantors have created to hold property where the trust instrument may not be revoked or changed. Be aware that gift taxes may apply to the property gifted into these [more…]
Revocable Trusts: Living, Totten, and Nominee
Living trusts, Totten trusts, and nominee trusts are the main types of revocable trusts. They can be revoked, amended, or terminated by the trust grantor, the person who creates the trust, any time before [more…]
What Are Inter Vivos Trusts and Testamentary Trusts?
An inter vivos trust is a trust that a grantor creates which functions during his or her lifetime. A testamentary trust is a trust that may be created upon the grantor’s death. Whether the trust is governed [more…]
What Are Grantor Trusts and Non-Grantor Trusts?
Grantor trusts and non-grantor trusts are the two main types of funded trusts, trusts that hold assets. The type of trust you’re administering determines whether you must file Form 1041 for the trust, [more…]
What Taxes Might an Estate Need to Pay?
An estate may need to pay several taxes, including federal and state transfer taxes. Federal transfer taxes include the federal gift tax, the federal estate tax, and the generation-skipping transfer [more…]
How to Deduct Administration Expenses for a Decedent, Estate, or Trust
When filing Form 1040 or Form 1041 for a decedent, estate, or trust, you must determine how to deduct administration fees. Deductions for attorney, accountant, and preparer fees are limited on Schedule [more…]
Charitable Deductions for a Decedent, Estate, or Trust
An estate administrator can only give money from an estate or trust to charity if the decedent’s will (or the trust instrument) explicitly instructs it. Because this rule is absolute, charitable deductions [more…]
How to File an Estate Trust’s Financial Records
As trustee, you should keep accurate and organized records of the trust’s financial records you receive from banks, brokerages, or other sources. The trust instrument or a request from a beneficiary may [more…]
How to Compile a Trust’s Correspondence
As a trust administrator, it is essential that you keep careful records of all correspondence that you send and receive. Send required trust documents by certified mail and keep all receipts. Also be sure [more…]
How to Pay Remaindermen when Terminating a Trust
When terminating a trust, any assets left after the final income distributions and the payment of all necessary expenses go to the remaindermen. Remaindermen are individuals or organizations named by the [more…]
