<html>
<head>
<meta http-equiv="Content-Type" content="text/html; charset=Windows-1252">
<meta content="text/html; charset=Windows-1252">
<meta name="Generator" content="Microsoft Word 15 (filtered medium)">
<style>
<!--
@font-face
{font-family:"Cambria Math"}
@font-face
{font-family:Calibri}
p.MsoNormal, li.MsoNormal, div.MsoNormal
{margin:0in;
margin-bottom:.0001pt;
font-size:11.0pt;
font-family:"Calibri",sans-serif}
a:link, span.MsoHyperlink
{color:#0563C1;
text-decoration:underline}
a:visited, span.MsoHyperlinkFollowed
{color:#954F72;
text-decoration:underline}
span.EmailStyle17
{font-family:"Calibri",sans-serif}
.MsoChpDefault
{font-family:"Calibri",sans-serif}
@page WordSection1
{margin:1.0in 1.0in 1.0in 1.0in}
div.WordSection1
{}
-->
</style>
</head>
<body lang="EN-US" link="#0563C1" vlink="#954F72">
<div style="width:100%; font-size:initial; font-family:Calibri,'Slate Pro',sans-serif,sans-serif; color:rgb(31,73,125); text-align:initial; background-color:rgb(255,255,255)">
I'd be glad to spend a couple of minutes with you on this. You should review 31 USC 3713.</div>
<div style="width:100%; font-size:initial; font-family:Calibri,'Slate Pro',sans-serif,sans-serif; color:rgb(31,73,125); text-align:initial; background-color:rgb(255,255,255)">
<span style="font-family:Calibri,'Slate Pro',sans-serif,sans-serif; font-size:initial; text-align:initial; line-height:initial"><br>
</span></div>
<div style="width:100%; font-size:initial; font-family:Calibri,'Slate Pro',sans-serif,sans-serif; color:rgb(31,73,125); text-align:initial; background-color:rgb(255,255,255)">
<span style="font-family:Calibri,'Slate Pro',sans-serif,sans-serif; font-size:initial; text-align:initial; line-height:initial"><br>
</span></div>
<div style="font-size:initial; font-family:Calibri,'Slate Pro',sans-serif,sans-serif; color:rgb(31,73,125); text-align:initial; background-color:rgb(255,255,255)">
Sent from my BlackBerry 10 smartphone.</div>
<table width="100%" style="background-color:white; border-spacing:0px">
<tbody>
<tr>
<td colspan="2" style="font-size:initial; text-align:initial; background-color:rgb(255,255,255)">
<div style="border-style:solid none none; border-top-color:rgb(181,196,223); border-top-width:1pt; padding:3pt 0in 0in; font-family:Tahoma,'BB Alpha Sans','Slate Pro'; font-size:10pt">
<div><b>From: </b>James W. Spencer</div>
<div><b>Sent: </b>Friday, November 16, 2018 10:41 AM</div>
<div><b>To: </b>WSBA Probate & Trust Listserv</div>
<div><b>Reply To: </b>WSBA Probate & Trust Listserv</div>
<div><b>Subject: </b>[WSBAPT] Unpaid Taxes and Fiduciary Duty to Beneficiaries</div>
</div>
</td>
</tr>
</tbody>
</table>
<div style="border-style:solid none none; border-top-color:rgb(186,188,209); border-top-width:1pt; font-size:initial; text-align:initial; background-color:rgb(255,255,255)">
</div>
<br>
<div>
<div class="WordSection1">
<p class="MsoNormal">Greetings Listmates:</p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">I have a… um, theoretical… situation.</p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">The facts are pretty simple (and likely quite common): Decedent dies in 2018. During the administration of Decedent’s estate, it is discovered that Decedent hasn’t filed annual income tax returns, likely for a decade or two. This is probably
not really an issue, as Decedent apparently didn’t work and had no W-2 income. However, in 2016, Decedent sold a home, and the proceeds are well outside of the $250,000 individual capital gains tax exemption for the sale of a primary residence. Unpaid capital
gains taxes are likely in the $75,000 - $100,000 range (depending on the final determination of the tax basis in the residence). Estate accountant is advising PR that the PR should file a tax return for 2016 and pay the capital gains tax. While beneficiaries
have already received some notable portion of the estate, this will (more than) eat up all remaining funds in the estate, leaving nothing else for the beneficiaries.</p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">I would love some opinions on the nexus between the PR’s fiduciary duties to the estate’s beneficiaries and the PR’s responsibility to properly administer the estate, including dealing with taxes. The underlying questions is whether it
a breach of fiduciary duty for the PR to file a tax return that will deny the beneficiaries significant funds where there is a very real possibility that the IRS will never come after those taxes if no return is filed.</p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">I have some opinions on this, but would really appreciate some feedback from the hivemind.</p>
<p class="MsoNormal"> </p>
<p class="MsoNormal">Thanks,</p>
<p class="MsoNormal">James</p>
<p class="MsoNormal"> </p>
<p class="MsoNormal" style="background:white">James W. Spencer</p>
<p class="MsoNormal">Attorney at Law</p>
<p class="MsoNormal">Brothers & Henderson, P.S.</p>
<p class="MsoNormal" style="background:white">2722 Eastlake Avenue East, Suite 200</p>
<p class="MsoNormal" style="background:white">Seattle, Washington 98102</p>
<p class="MsoNormal" style="background:white">Phone: (206) 324-4300 x106</p>
<p class="MsoNormal" style="background:white">Fax: (206) 324-3106</p>
<p class="MsoNormal" style="background:white"><span style="color:black">e-mail: </span>
<a href="mailto:jamess@brothershenderson.com"><span style="color:blue">jamess@brothershenderson.com</span></a></p>
<p class="MsoNormal" style="background:white"><a href="http://www.brothershenderson.com/"><span style="color:blue">www.brothershenderson.com</span></a></p>
<p class="MsoNormal" style="background:white"><img border="0" width="196" height="56" id="Picture_x0020_1" src="cid:image003.jpg@01D47D97.F2E38E00" alt="cid:image001.jpg@01D33AF1.1F3913C0" style="width:2.0416in; height:.5833in"></p>
<p class="MsoNormal"><span style="color:black">The information transmitted in this e-mail message and attachments is attorney-client information, is privileged or confidential material and is intended only for the use of the individual or entity named above.
You are hereby notified that any disclosure, copying, distribution, review by or taking of any action in reliance on the contents of this e-mail information by unauthorized persons is strictly prohibited. All personal messages are solely the views of the sender
and are not to be attributed to Brothers & Henderson, P.S. If you have received this transmission in error, immediately notify the sender by reply e-mail and permanently delete this transmission and all copies including attachments.</span></p>
<p class="MsoNormal"> </p>
</div>
</div>
</body>
</html>