[WSBAPT] Trust Administration/Tax Refund Question

[Doehne, Jen]

Hi Brent,
I would be curious as to the origin of the “IRS” form.
My understanding is the IRS just wants a contact person, whether appointed by court or not.
https://www.irs.gov/taxtopics/tc356 Notice the first sentence: “…or anyone else in charge of the decedent’s property.” See also https://www.irs.gov/publications/p559 (search “respon”, the 3rd entry of Pub 559 echoes topic 356 “…or anyone who is in charge of the decedent’s property.”)

My takeaway is that your client as trustee would be responsible for filing and paying any required liabilities out of the decedent’s Trust assets. (And that personal liability would end if the decedent’s assets are depleted.)

Would love to hear other thoughts because this does come up for me on occasion but I have never seen an IRS form that requires me to open a probate.

Best,
Jen


Jen Doehne, Attorney
Pronouns she/her/hers
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From: wsbapt-bounces at lists.wsbarppt.com <wsbapt-bounces at lists.wsbarppt.com> On Behalf Of Brent Williams-Ruth
Sent: Tuesday, April 18, 2023 12:12 PM
To: WSBA Probate & Trust Listserv <WSBAPT at lists.wsbarppt.com>
Subject: [WSBAPT] Trust Administration/Tax Refund Question

Greetings List Members -

I have been assisting a Successor Trustee with the administration of a Trust upon the death of the Trustor.  The Successor Trustee has NO BLOOD RELATION to the Trustor, but was like a family member.  We all know the type.

Here is the issue - there is no Pour-Over Will.

The Decedent Trustor had done an amazing job of leaving every single asset into his Trust. We filed the non-probate Notice to creditors, the successor trustee has successfully closed all accounts (phone, cable, utilities, etc.) - all that is left would be to claim an income tax refund.

I have been shown an IRS form that asks three questions - is there a will; has the will be probated/are you the PR; and if the answer to the first two are no, will you pay out the refund according to law in the state where he died.

Since there is no Pour-Over Will.....if the Trustee claims the money, she will need to locate the family members (who were - for all intents and purposes - disinherited by their father) and spread the income tax refund to them because this is a tax refund for him, personally, not for the Trust that had been set up using his Social Security number.

For many reasons, this is not a path the Trustee would like to go down but I am not seeing an alternative.

Appreciate any tips or suggestions.

Thank you!
Brent



Brent Williams-Ruth (pronouns: he/him)

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