Understanding Estate Planning

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How to File an Estate’s Probate Inventory

The probate court will require the executor of an estate to file an inventory of all the decedent’s assets. Preparing this probate inventory should be the executor’s next step after finding the assets [more…]

How to Pay an Estate’s Final Administration Expenses

As you move toward the end of the estate administration process, you will need to pay the estate’s final administration expenses. This includes paying all remaining attorney and accountant fees. [more…]

How to Prepare Accounts for Allowance by a Probate Court

When preparing accounts for allowance, you will need to choose the accounting form used in your local probate court. Some states require principal and income accounting, and others require receipts and [more…]

How to Formalize Your Selection of an Estate Attorney

After you have researched attorney credentials, interviewed estate lawyers, and discussed pricing, you will be ready to make a final decision on an attorney to assist with the administration of your estate [more…]

How to Obtain Beneficiary Assent when Preparing Accounts for Allowance

In the process of closing the decedent’s estate, while preparing accounts for allowance by the probate court, you will need to obtain the assent (a form of written agreement to the account) of each interested [more…]

How to Liquidate an Estate’s Securities and Real Estate

Liquidating — distributing or selling — estate assets is one of the primary responsibilities of an estate administrator. Liquidation can help to pay the estate’s debts and expenses and make distributing [more…]

What Are Key Bond Terms for a Trust?

Investing in bonds can be one of the safest and easiest ways to invest, yet many people shy away from these investments because they may not understand all the words used in their descriptions. This article [more…]

How to Diversify Mutual Funds for a Trust

In a mutual fund, a group of like-minded investors pool their money, hire an advisor, and allow the advisor to invest the pooled cash in a way that’s been determined by the investors. In exchange for the [more…]

How to Satisfy Cash on Hand Needs for a Trust

As much as you want to maximize the income being earned by the trust’s principal, you need to keep some cash on hand at all times for both expected and unexpected expenses. Expected expenses include scheduled [more…]

How to Manage Real Estate for a Trust

Often, the grantor’s residence may end up in the trust, either during lifetime or after the grantor’s death. Or, the grantor may have held interests in either residential or commercial real estate, either [more…]

How to Manage Small Business Stocks for a Trust

Whether a trust receives small business stock during the grantor’s lifetime or as part of the decedent’s estate rolled into the trust after death, you may find yourself holding a substantial interest in [more…]

How to Diversify Stocks for a Trust

Investing in the stock market is a popular way to produce income from trust principal for the trust’s income beneficiaries. Stocks, sometimes referred to as equities, are ownership interests in corporations [more…]

How to Appraise a Decedent’s Real Estate Holdings

As the executor of an estate, you must value the estate’s real estate holdings at the time of the decedent’s death. You may be able to use the real estate assessment as the value at the date of death. [more…]

Consider Beneficiary Needs and the Trust’s Purpose

Beneficiaries’ needs change over time, and trust investments need to change in relation to them. As the trustee, you have to determine what the trust must do in order to meet those needs. You must keep [more…]

Recapture and Household Employee Taxes for a Decedent, Estate, or Trust

When you file taxes for a decedent, estate, or trust, you may have to pay recapture taxes or household employee taxes. Recapture and household employee taxes are included on Schedule G of Form 1041. For [more…]

How to Calculate the Estate Tax Deduction

The estate tax deduction deals with items of Income in Respect of Decedent (IRD). Income in Respect of Decedent items can be subject to both the estate tax and an income tax. The estate tax deduction compensates [more…]

How to Calculate Estate or Trust Income Distribution Deductions (Schedule B)

The Income Distribution Deduction (Schedule B) is unique to trusts and estates. When trusts and estates give income payments to beneficiaries, those payments carry income tax consequences for the trust [more…]

Meet Probate Court and Tax Deadlines for Estates and Trusts

You must meet all probate court deadlines to avoid being removed as executor or trustee and to avoid fines or even jail sentences. File income tax returns, Form 1041, and estate tax returns, Form 706, [more…]

Handle an Estate’s Heirs, Legatees, and Beneficiaries Wisely

As the executor of an estate, interact with the estate’s heirs, legatees, and beneficiaries wisely and with care. Be sure to divide the estate’s personal property fairly among the heirs. Also be sure to [more…]

How to Deduct Fiduciary Fees for an Estate or Trust

When preparing an estate or trust’s income tax Form 1041, you may deduct fiduciary fees. Fiduciary fees are the amounts executors, administrators, or trustees charge for their services. If you’ve figured [more…]

How to Deduct Interest and Taxes for a Decedent, Estate, or Trust

When preparing a decedent’s final income tax Form 1040, or an estate or trust’s Form 1041, you may deduct certain types of interest and taxes. Interest paid on mortgages and stock margin accounts may be [more…]

Farm Income, Ordinary Gains, and Other Income for a Decedent, Estate, or Trust

When filing Form 1040 or Form 1041, you need to determine if the taxpayer (whether trust, estate or decedent) has earned any farm income, and calculate any gains and losses on the sale of business assets [more…]

Calculate Income from Rents, Royalties, Partnerships, and Other Estates and Trusts

In order to file Form 1040 or Form 1041, you will need to determine if the taxpayer (whether trust, estate or decedent) has earned any incomes from rents, royalties, partnerships, or other estate or trusts [more…]

What Are Estate and Trust Gift and Generation-Skipping Taxes?

As the administrator or an estate or trust, be aware of the gift tax and the generation-skipping transfer tax. Large transfers made during lifetime, may be subject to the gift tax. To pay the gift tax, [more…]

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…]


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