Death of a Taxpayer

When a taxpayer dies, there are certain returns that still need to be filed, a responsibility that falls onto the personal representative.

Personal Representative      

Under state law, a personal representative is the person appointed by a court to administer an estate. The term includes both executors (appointed when decedent has a will) and administrators (appointed in the absence of a will). A personal representative nominated in a will has no authority over estate assets unless appointed by a court.

Duties of Personal Representative

Duties include collecting all of the decedent’s property, paying any creditors, and distributing assets to beneficiaries. In addition, the representative is responsible for filing various tax returns and seeing that the taxes owed are properly paid.

No Court-Appointed Representative

When there is no probate and no appointed representative, the IRS will allow a “person charged with property of the decedent” to file the decedent’s income tax returns and claim refunds. IRS written guidance does not specify who this person should be. If there is a surviving spouse, he or she usually files a joint final Form 1040 and any other required returns. If there is no surviving spouse, the person who files is commonly: • The trustee of the decedent’s revocable trust,

The personal representative nominated in the will who would have been appointed if probate was required, or

A beneficiary receiving nonprobate assets who under-takes the work.

The IRS uses the term “personal representative” to refer to anyone filing for a decedent, whether or not court appointed.

Visit us on Thursday, October 2 for Part 2 of this series.

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• Death and Debt (lawprofessors.typepad.com)
• Who Should You Ask to Be Executor of Your Estate? (dailyfinance.com)

Be Sure to Make a Will

If you have a family and a home, you need a Will. Wills are your chance to say who gets what in your estate when you pass away—including your house and possibly the assets in your retirement plan in absence of a valid designation of beneficiary form. Without a Will, state law will determine how your assets are distributed and who will take care of your children. And those decisions may not be what you want. A Will can be drawn up quickly and easily by a lawyer, which will typically cost between $200 and $750.

Put Someone in Charge
First, decide who you want to be the executor (or executrix, if a woman) of your estate. He/she is the one who will be responsible for filing your Will in probate court. The executor is often a spouse or partner, but you can—and should—name an alternate, in case he or she dies before you or can't handle the responsibility for some reason.

Protect Your Kids
Second, name a guardian for your children if they are under 18. This is important because if you and your spouse were to perish at the same time—unlikely as that may seem—a judge would decide who will take care of them if you have no Will. Consider naming an alternate guardian as well.

Distribute Your Assets
Next, decide how you want your assets to be distributed to your loved ones and make sure your specific desires are stated clearly.

Keep it Current
Finally, once you have a Will, remember to update it whenever there is a significant change in your family's circumstances—like a birth, a death or a marriage. Although making a Will may seem like a chore now, it will help your loved ones tremendously down the road.

The information contained herein represents the opinions of a third party and does not necessarily represent the opinions of Naperville Accounting Services Firm of Susan S. Lewis Ltd or Naperville Financial Services team, Platinum Financial and are unaffiliated with any of the entities referenced above.

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