Home|Our Services|Our Philosophy|Client Center|Planning Ideas|Resources|Disclosure|Contact Us

Financial Briefs

More Articles  Printer Friendly Version

 

How Can We Help You Die In Peace?

"Financial peace of mind" is an overused term in financial services marketing. However, the help we provide in settling financial details of your estate indeed may bring you genuine—and eternal—peace of mind.

After you pass away, a personal representative, usually your executor, is required to prepare a regular income tax return in the year of your death (Form 1040). If any passive unearned income was paid to you after your death, for example, from real estate investments or businesses in which you are not an active participant, your executor must also file an estate income tax return (Form 1041). If you die this year, for example, your 1041 is going to be due on April 15th of the next year.

The executor of your estate also must apply for an EIN (Employer Identification Number). Your executor will also be responsible for informing various government entities, like the Social Security Administration, that you died. In addition, your personal representative or executor must provide detailed contact information where correspondence related to IRS and state tax filings can be sent.

In the unlikely event you have a taxable estate and trust—only about 1% of estates are federally taxable—your executor and trustee may need to file a Form 56, Notice Concerning Fiduciary Relationships, which arranges for the IRS to send tax correspondence. In addition, the estate will be required to tell the IRS if taxes will be paid annually on a calendar- or fiscal-year basis.

Where your death can become more complicated for your heirs, trustee, and executor is when they learn, after you're gone, that you underpaid the IRS. An executor or trustee would be obliged to confess to the IRS that you ran afoul of the rules and may owe them some money. Take comfort in knowing that the IRS often is forgiving about confessed mistakes.

As financial fiduciaries, we are available to counsel you on matters of trust and, yes, help you achieve financial peace of mind.


Email this article to a friend


Index
Don't Be Deceived By New Tax Law's Name
China Poses A Hidden Risk For Many 401(k)s
Growth Of The Consumer Class And The Investment Outlook
Exceptions To The New Rule On Inherited IRAs
Repeated Tax Reforms Raise The Risk Of Doing Nothing
Boomers Working Past Age 65 Are A Surprise Boost
Study: Wall Street's Tactical Methodology Isn't Working
Three Major Investing & Tax Planning Trends For 2020
SECURE Act Is Law: Last Call For 2019 Tax Savings
Performance Anxiety: A Leading Cause Of Investor Dysfunction After Age 55
How Worldwide Demographics Affect Your Portfolio
Financial Lifeboat Drill For Mustering In Emergencies
Hiddenomics™ Challenge: Find The Leading Economic Indicators
20-Second Year-End Tax Planning Quiz For Pre-Retirees
Last Chance In 2019 For Pre-Retired Professionals & Biz Owners
The Fed Just Cut Rates Again; What's It Mean To You?

This article was written by a professional financial journalist for William Howard & Co. Financial Advisors, Inc. and is not intended as legal or investment advice.

©2020 Advisor Products Inc. All Rights Reserved.
© 2020 William Howard & Co. Financial Advisors, Inc. | International Place II | 6410 Poplar Avenue, Suite 330, Memphis, TN 38119 | All rights reserved
P: 901-761-5068 | F: 901-761-2217 |
Disclosure | Privacy Policy | Contact Us