Trust/Deceased Question

[Denne]

I received a stack of paperwork from a client regarding his mother. She passed away in 2006, however a Trust was not formed until August of 2007. What I have been given in some paperwork that has her social security number on the income items and he has separated the business expenses into that catagory too. Then I have the income and expenses after the Trust was formed. His mother had a care home for her grandson and the family members and friends kept the home going until the grandson's death in 2007.

I am not familiar with the handling of such a situation. Do I actually file a return for his mother two years after her death or do I put everything into the Trust? When I did the 1099 forms for the people that worked taking care of the grandson I was given the Federal ID number of the business that was already established. Should they be chanced to be under the Trust. Monies did seem to be mixed a bit, but just because no one seemed to quite know what they were supposed to be doing.

Suggestions as to how to handle this??

Thanks......

[BulldogTom]

The estate was formed the date of death, regardless of when the EIN was requested.

This is a specialized area of practice, so you might want to get some help on this. If you want to go it alone, go for it.

My take, you need to find out first who is the executor of the mother's estate. That is your client. Then you need to know what testimentary documents existed prior to the date of death. This will tell you if there is a trust (sounds suspiciously like there was - but the facts are cloudy) that recieved assets of the estate, or if there is a probate process that still needs to happen. It also sounds like there is some kind of business, so there should be some trust accounting going on for the beneficiaries, and this accounting will be per the trust document, or if there is no document, but your state law.

Someone needs to know what the mother had at her death, who is supposed to get that stuff, and who is supposed to make it all happen. Find that out first, then you can proceed from there. Without this knowledge, you cannot do this job, and no one on this board can help you go any further either.

Good luck and charge lots.

Tom

Lodi, CA

[joelgilb]

Do a lot of work with estates if you need some specific advise, PM me and I will send my Tel # and we can talk.

Tom is correct that Estate was formed as a matter of law on the date of death. You may have an Executor, an Administrator depending on whether or not there was a Will. You also need to determine if a Probate was ever filed and if so get information on the probate from the attorney that handled it (as an attorney I do and have done probate work in IL).

You will need the Wills and Trust documents if any. There may have been Trust documents prior to the death or they could have been created upon death by a Will. Another possibility is the family created a trust on their own after deat, although this is unlikely.

You will also need inventories of the assets at the Date of Death (DOD) with DOD values and values at the 6 month alternate valuation date. How big was the estate? Was it taxable? Was a 706 filed or needed? Be careful on what you take on as part of the job might be legal work and you can have issues if you take on this piece. "Practicing Law without a License, is a crime in every State. On the other hand there was probably an attorney involved that you could run questions by to determine what was done and limit the scope of your work to the tax and accounting pieces.