| GENERAL ITEMS | EXPLANATION |
• List of executors' names, addresses and social security numbers if there is more than one executor.
• Notice of fiduciary relationship. The term fiduciary means any person acting for another person. It applies to persons who have positions of trust on behalf of others. A personal representative for a decedent's estate is a fiduciary. |
• Form 56 If you are appointed to act in a fiduciary capacity for another, you must file a written notice with the IRS stating this. Form 56, Notice Concerning Fiduciary Relationship, is used for this purpose. See the Instructions for Form 56 for filing requirements and other information.
Tip: File Form 56 as soon as all the necessary information (including the EIN) is available. It notifies the IRS that you, as the fiduciary, are assuming the powers, rights, duties, and privileges of the decedent. The notice remains in effect until you notify the IRS (by filing another Form 56) that your fiduciary relationship with the estate has terminated.
• Termination of fiduciary relationship Form 56 should also be filed to notify the IRS if your fiduciary relationship is terminated or when a successor fiduciary is appointed if the estate has not been terminated. See Form 56 and its instructions for more information.
At the time of termination of the fiduciary relationship, you may want to file Form 4810, Request for Prompt Assessment Under Internal Revenue Code §6501(d), and Form 5495, Request for Discharge From Personal Liability Under Internal Revenue Code §2204 or §6905, to wind up your duties as fiduciary. See below for a discussion of these forms.
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| • Certified copy of will if decedent died testate (died leaving a valid will) |
• You will need a copy of the will. Your spouse's lawyer may have the will or it may be in a safe, a safe deposit box, or with your spouse's personal belongings.
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| • Request for Early Determination of Estate Tax |
• Request for prompt assessment (charge) of tax The IRS ordinarily has 3 years from the date an income tax return is filed, or its due date, whichever is later, to charge any additional tax due. However, as a personal representative, you may request a prompt assessment of tax after the return has been filed. This reduces the time for making the assessment to 18 months from the date the written request for prompt assessment was received. This request can be made for any tax return (except the estate tax return) of the decedent or the decedent's estate. This may permit a quicker settlement of the tax liability of the estate and an earlier final distribution of the assets to the beneficiaries.
• Form 4810 Form 4810 can be used for making this request. It must be filed separately from any other document.
• Requesting Discharge From Liability The executor representing a decedent's estate or a fiduciary of a decedent's trust may request a discharge from personal liability for the decedent's income, gift, and estate taxes using Form 5495, Request for Discharge From Personal Liability Under Internal Revenue Code Section 2204 or 6905. The executor or fiduciary will be discharged from personal liability for any tax deficiency later found to be due 9 months (or 6 months in the case of a fiduciary's request) after the IRS's receipt of the request for discharge, or the earlier payment of any amount determined by the IRS to be owed. In certain instances where the date for payment of the estate tax has been extended, the IRS may require a bond as a condition for discharge.
Tip: Form 5495 should not be filed until after the tax returns are filed for which discharge from liability is requested. If requesting a discharge from personal liability for the estate tax, Form 5495 may be attached to Form 706. If Form 5495 is not filed with the Form 706, it may be filed any time during the 3-year period following the date the Form 706 is filed. A taxpayer must submit a separate request for discharge from personal liability for any tax returns filed after Form 5495.
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| • Form 2848, Power of Attorney, if executor wishes to grant authority to someone to represent the estate or enter into closing agreements with the IRS | You have the right to represent yourself or have someone represent you before the IRS in connection with a federal tax matter. Your representative must be an individual authorized to practice before the IRS. If you want someone to represent you before the IRS, you must submit a power of attorney with the IRS office where you want your representative to act for you. |
| • Copy of foreign probate court papers if decedent was a non-resident citizen |
Tip: Use Form 706-CE if foreign death tax is to be claimed
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• Copy of Death Certificate
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• Many of the offices or agencies you contact will require you to provide a copy of the death certificate. You can buy certified copies of the death certificate through your funeral director or directly from the county health department for a small fee, typically a few dollars per certificate. It is worth paying the money for the certified copies however, since many companies require it.
Tip: Whether you think you need them or not, try to get at least 10 certified copies of the death certificate.
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| • Certified copy of court order admitting will to probate |
• If your spouse had a valid will, try to find a copy of it. Check with your lawyer, family and anyone who might know where the will is kept. It may be stored in a safe deposit box, which is sealed at the time of death in some states.
Caution: Wills should not be stored in safe deposit boxes.
If your spouse did not have a will, his or her estate will be distributed according to state intestacy law. However, the state intestacy law will not apply to property where the title is in the name of the deceased and another person who has a right of survivorship. This property automatically passes to the co-owner.
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| • Copy of court decree interpreting will (also order of distribution if entered at time return is filed) |
• Probate is the legal process of paying the deceased's debts and distributing the estate to the rightful heirs. This process usually entails:
○ The appointment of an individual by the court to act as personal representative or executor of the estate; this person is often named in the will. If there is no will, the court appoints a personal representative, usually the spouse.
○ Proving that the will is valid.
○ Informing creditors, heirs, and beneficiaries that the will is to be probated.
○ Disposing of the estate by the personal representative in accordance with the will or state law.
• The personal representative named in the will must file a petition with the court after the death. There is a fee for the probate process. Depending on the size and complexity of the probable assets, probating a will may require legal assistance.
• Assets that are jointly owned by the deceased and someone else are not subject to probate.
• Proceeds from a life insurance policy or Individual Retirement Account (IRA) that are paid directly to a beneficiary are also not subject to probate.
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| • Statement explaining prior payments of estate tax |
Tip: Schedule Q -- Credit for Tax on Prior Transfers
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| • Statement regarding flower bonds redeemed to pay estate taxes | • 'Flower Bond': Fixed income products that were originally purchased by investors at a discount for the purpose of paying federal estate taxes upon their maturity. |
| • Evidence regarding dispositions of property within six months if alternate valuation date is elected |
Tip: IRC §2032(a) allows executors to elect to value an estate on the date that is six months after the date of death. Any property distributed, sold, exchanged or otherwise disposed of during the six months is valued as of the date of its disposition. However, any interest whose value changes by merely the lapse of time is valued as of the date of death, with an adjustment allowed for any difference in value due to any factor other than the lapse of time (§2032(a)(3)).
• Distributions, sales, exchanges, and other dispositions of the property within the 6-month period after the decedent's death must be supported by evidence. If the court issued an order of distribution during that period, you must submit a certified copy of the order as part of the evidence. The IRS may require you to submit additional evidence if necessary.
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| • Copy of qualified disclaimer of property instrument | • For purposes of Federal estate, gift and generation-skipping transfer taxes, a disclaimer is an irrevocable and unqualified refusal by a person to accept an interest in property. Properly disclaimed property will be treated as though it had never been transferred to the person making the disclaimer.
Tip: In most cases, the tax consequences of receiving property fall far short of the value of the property itself. It is usually more beneficial to accept the property, pay the taxes on it, and then sell the property, instead of disclaiming interest in it.
• When used for succession planning, qualified disclaimers should be used in light of the wishes of the deceased, the beneficiary and the contingent beneficiary.
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| EXTENSION OF TIME TO FILE OR PAY ESTATE TAX |
EXPLANATION
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| • Form 4768 if extension of time to file or pay has been granted |
• Federal Estate Tax. Estate tax is generally only due on estates exceeding the unified credit exemption equivalent, which for 2012 is $5,120,000. In 2011, the exemption amount was $5,000,000 and in 2010, there was no exemption amount. Estates over $5,120,000 are subject to 35% tax.
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| • Notice of election where installment payments of estate tax on closely held businesses is elected or notice of protective election | Tip: If the gross estate includes an interest in a closely held business, you may be able to elect to pay part of the estate tax in installments under §6166. In general, that amount is the amount of tax that bears the same ratio to the total estate tax that the value of the closely held business included in the gross estate bears to the adjusted gross estate. |
| • Notice of election to postpone estate tax on reversionary or remainder interest (if this applies, a copy of the will or other instrument creating such interest should be attached). |
Tip: If an estate includes a remainder or reversionary interest that qualifies under §6163, an executor may defer payment of the estate tax on such interest until six months after the termination of the preceding interest. Furthermore, for reasonable cause, an executor can extend this period for up to three years beyond the initial six-month period.
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CREDITS
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EXPLANATION
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| • Foreign death tax return if decedent was a non-resident citizen. |
______________________________
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| • Certificate of payment of state death taxes |
• State Death Taxes. State laws vary, but generally any estate which pays a federal estate tax must also file a state estate or death tax form and pay the state death tax. This amount is paid by the estate to the state in which the deceased lived.
• State Inheritance Taxes. Again, state requirements vary. Most states charge no inheritance tax.
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| • Form 4808 - Computation of Federal Gift Tax Credit | Tip: You may take a credit for Federal gift taxes paid under IRC Chapter 12 (IRC §2501), and the corresponding provisions of prior laws, on certain transfers the decedent made before January 1, 1977, that are included in the gross estate. See IRC §2012 for details.
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GROSS ESTATE
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EXPLANATION
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• Schedule A -- Real Estate
• Schedule A-1
-- Section 2032A Valuation
| • Real estate appraisals |
| • Schedule B -- Stocks & Bonds |
• Brokerage account statements
• Five years balance sheets and earnings statement of any closely held business
• Valuation information of any closely held stock
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| • Schedule C -- Mortgages, Notes & Cash | • Valuation information for any mortgages and notes valued less than the face amount (e.g. letters from brokers or financial information from a financially distressed company). |
| • Schedule D -- Insurance on the Decedent's Life |
• Form 712 relating to life insurance.
• The proceeds from an insurance policy can generally be paid directly to the named beneficiary. These claims can be processed quickly and are an important source of income for the survivors during this difficult time.
Tip: File claims for insurance policies as soon as possible, especially if finances are a concern.
• You may be required to decide you want the payments made. Options might include taking the money in a lump-sum, or having the insurance company make fixed payments over a period of time. Which payment option to choose depends on your financial situation. You may, for example, want smaller fixed payments in order to have a steady income. Or you may want the full amount immediately to pay bills or to invest.
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| • Schedule E -- Jointly Owned Property |
• Appraisal information
• Forms 712 relating to life insurance (statement explaining exclusion of life insurance from gross estate).
• Proof of co-tenants' interests in joint property.
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• Schedule F -- Other Miscellaneous Property
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• Appraisal information
• Safe deposit box contents excluded from gross estate
• Forms 712 relating to life insurance (statement explaining exclusion of life insurance from gross estate).
• Copy of any trusts in which decedent had an interest
• Five years balance sheet and earning statement of any closely held business
• Valuation information of any closely held stock, partnership interest or other business interest
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| Schedule G -- Transfers During Decedent's Life |
• Copies of federal gift tax returns (Forms 709 and 709-A)
• Calculations includable gift taxes paid within three years of death
• Informational statement regarding certain lifetime transfers (including copy of any transfer agreement)
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Schedule H --Powers of Appointment
| • Power of appointment instruments |
| • Schedule I -- Annuities | • The names, addresses and identification numbers of the recipients of any lump-sum distribution if an election is made to exclude such amount from the gross estate. |
• Schedule J -- Funeral Expenses &
Expenses Incurred in Administering Property Subject to Claims
| • Evidence to support payment of executor's and attorney's fees |
| • Schedule M -- Bequests etc. to Surviving Spouse (Marital Deduction) |
•Marital deduction computation for certain formula bequests under pre-September 12, 1981 wills
• Statement and calculation regarding deduction for residency marital bequest
• Computation of death taxes paid out of marital bequest
• Copy of qualified disclaimer if any property passed to the surviving spouse as a result of a disclaimer
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| • Schedule O -- Charitable, Public, and Similar Gifts and Bequests |
• Written instrument of any charitable transfer
• Computation and supporting data regarding deduction for residency charitable bequest
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• Schedule P -- Credit for Foreign Death Taxes
| • Form 706-CE if foreign death tax credit is claimed |
• Schedules R and R-1 —Generation-Skipping Transfer Tax
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• If the decedent had been adjudged mentally incompetent, a copy of the judgment or decree must be attached (mental disability provision). If not adjudged mentally incompetent, a letter from physician must be attached if decedent was mentally incompetent. This is required if the mental disability grandfather rule applies.
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