Trusts

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What Are the Decedent’s Final State and Federal Income Taxes?

As the administrator of an estate, you must file the decedent’s final Form 1040, U.S. Individual Income Tax Return. Surviving spouses may file a final joint return for the year of the decedent’s death. [more…]

What Are Excise and Local Income Taxes for Estates and Trusts?

If the estate or trust that you are administering owns vehicles of transportation, such as planes, boats, and automobiles, you may have to pay a yearly [more…]

What Are Estate and Trust State Intangible and Real Estate Taxes?

Instead of income taxes, some states have intangible taxes on assets such as stocks and bonds. If you are administering an estate or trust, check to see whether your decedent’s state has intangibles taxes [more…]

What Are Estate and Trust Income Taxes?

If an estate or trust earns income, that income may be subject to income taxes. Follow the federal government criteria for determining whether your estate, simple trust, or complex trust earned enough [more…]

Make Proper Payments from the Trust Income and Principal

As a trustee, you must know when to make payments from the principal of the trust and when to make payments from the income of the trust. For your trustee fees, create an equitable formula so that a percentage [more…]

Don’t Take Unsanctioned Shortcuts for an Estate or Trust

Treat your job as an executor, administrator, or trustee with care and act reasonably and responsibly. Realize that this job is a major, and often time-consuming, commitment to fulfill the wishes of the [more…]

Exercise Good Fiduciary Judgment for an Estate or Trust

As the executor or trustee, it is crucial that you use good fiduciary judgment. Seek sound professional advice, invest the estate or trust assets wisely, and pay beneficiaries and all bills on time. Be [more…]

How to Research a Potential Estate Attorney’s Credentials

When choosing an attorney to assist with your estate or trust, you should research credentials and conduct interviews. Check the Web site of the firm at which the estate lawyer is employed. Also check [more…]

How to Calculate Interest and Dividends for a Decedent, Estate, or Trust

When filing Form 1040 or Form 1041, your first task is to determine how much income the taxpayer (whether trust, estate or decedent) earned. Two of the main types of income you’ll have to deal with are [more…]

How to Determine Final Income Distributions for Trust Beneficiaries

When terminating a trust, you must be certain that all required income distributions have, in fact, been made to the income beneficiary before you can distribute the remaining trust principal to the person [more…]

How to Pay a Trust's Expenses

In addition to making payments to the beneficiaries, as trustee, you’re also responsible for paying the expenses you incur in administering the trust. The primary expenses include trustee’s fees, investment [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…]

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 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 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…]

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 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…]

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…]

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