Planning for all situations is key to a business’s on-going success. Succession Planning should not be overlooked.
When a person passes away, the legal representative (executor) has to file a final income tax return. The estate demonstrates everything a person owns when they pass (i.e. property, debts, etc.).
An estate tax return is different from a family or other Trust return as the underlying result is a person leaving assets upon passing away. Once deceased, a testamentary trust is created and is afforded graduated tax rates, similar to personal managerial tax rates, for its first three (3) tax years and is often referred to as a “Graduated Rate Estate.”
In many cases, an Estate tax return may not be required as the Estate’s affairs are wrapped up with other “optional” returns. In circumstances where an “optional” estate will not suffice; the Estate’s tax year usually encompasses the period from the day after passing away until the anniversary of date of death. If the Estate is not wrapped up within its first tax year, it will continue to have the same tax year.
Let Numbers Plus® help you through a difficult time and ensure that the Estate, and Testamentary Trust, is properly positioned to minimize the tax and probate fees that may apply.