Are fiduciaries responsible for filing tax returns?

Posted by Angela Holliday Hansen Esq. | Dec 18, 2014 | 0 Comments

After a person in Maryland dies, a person, trust company or financial institution will be designated as the fiduciary of their estate. The decedent can name a fiduciary in an estate planning document, such as a will or trust, or the court can designate someone as a fiduciary.

One role of the fiduciary is to handle any tax returns that need to be filed. For example, an annual federal income tax form will need to filed for the year the decedent died. In addition, if the decedent had any extensions on prior tax returns, those will need to be completed as well. Also, fiduciaries will have to determine whether the decedent missed any tax returns for previous years, which may happen if the decedent was very sick before they passed away. Another tax that may need to be filed for the year the decedent died is a generation-skipping or gift tax form.

Also, as of 2013, the fiduciary must file a federal estate tax return if the decedent's estate, prior to any deductions, is worth more than $5.25 million. However, there may be exceptions dictating that estate taxes must be filed even for lesser estates.

Fiduciaries should also be aware that when it comes to income taxes, there are many rules regarding income tax brackets of the estate and beneficiaries. Therefore, care must be taken when it comes to distributing funds. The rules surrounding this are very complicated, so working with a professional may be a good idea for all involved.

The above information should not be considered personal legal advice for any fiduciaries, and is meant for general purposes only. Those with further inquiries about estates and taxes may want to seek the help they need to answer these questions.

About the Author

Angela Holliday Hansen Esq.

Angela Holliday Hansen, Esq., is a former big firm corporate attorney who now practices family law in Rockville Maryland. Ms. Hansen oversees complex estate administration and drafts...

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