Taxation

Taxes and tax returns don’t end with death. After an individual passes away, his or her income tax return may need to be filed for the final (partial or full) tax year. The obligation for filing that return often falls to the executor or successor trustee.

In addition, taxable activity of an estate occurring from the death of individual until distribution of the income generating property to the heirs or recipients may require the filing of fiduciary income tax returns. During that time, the estate may collect income from things like unpaid wages to the deceased, rent from properties held by the estate, and interest or dividends on estate-owned financial accounts.

Similarly, a return may also need to be filed for any trust(s) that the decedent grantor had in place. The decedent’s grantor trust becomes a separate a legal entity upon the grantor’s death, and can generate income and expenses and may need to file a return if it has taxable income.

Taxation of individuals, estates, and trusts are always changing and can quickly become complicated. In many cases, executors or trustees can benefit from speaking with legal and tax professionals who have experience handling these types of returns. Catherine Hoopert regularly helps families, executors, and trustees manage the tax matters of their deceased loved one.