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What tax-related duties does the personal representative have?

On Behalf of | Jul 10, 2023 | ESTATE PLANNING - Estate Administration & Probate

When an estate enters probate, the court might appoint someone as the personal representative. This person represents the deceased’s estate and carries out essential tasks through probate. This role typically goes to a family member or another entity based on state laws and the deceased’s wishes if indicated in their will.

The personal representative has various duties related to the estate, including preliminary work of making an inventory of assets, organizing debt details and contacting relevant agencies to settle the deceased’s financial obligations. The representative will also fulfill tax-related tasks for the deceased and their estate. They will need to file the following:

  • The deceased’s income tax returns: Includes the deceased’s year of death and any prior years left unfiled.
  • Estate’s income tax returns: The estate might require an identification number. Also, this requirement might apply only if the estate makes over $600 worth of income annually. Other procedures could apply if the estate has a business operating after the owner dies. It might include additional concerns regarding the company, wages, income and proper taxes due.
  • Estate tax returns: These are taxes on asset transfers from the deceased to their beneficiaries and heirs. It might only apply to considerable estates, depending on the circumstances.

Some requirements could only be appropriate based on the estate and its size. However, the representative would need the deceased’s tax information before filing any documents.

A personal representative’s responsibilities

This role could bring various challenges, especially if the deceased’s estate has complex requirements. Aside from settling tax matters, they must commit themselves to moving through the probate process while meeting deadlines and updating involved parties about any developments.

Additionally, the representative is accountable for any issues regarding the estate. The court might also order them to pay for any estate losses due to mismanagement. Nevertheless, the right person for this role should be honest and committed to doing right by the deceased, the law and the beneficiaries.