Estate Settlement

Trust Tax 101

Trusts are considered a kind of business for tax purposes. They have their own tax ID and will receive their own 1099s from whatever assets they own.

In most businesses, the owners choose how the business’s income will be taxed when the business is set up. Most small businesses are set up as “flow-through” entities, meaning that if the business earns income, the owners pay the taxes in proportion to their ownership. The business files a tax return, but does not pay any taxes. Most large corporations are taxed at the corporate level, meaning the company pays all taxes on its income. The shareholders only pay tax to the extent they receive a dividend from the company.

In trusts,

Death and Taxes – Tax Issues in Probates

When we assist personal representatives in probates, we are often asked about taxes and tax filing requirements associated with probate. This post explains the possible tax filings that might be required as part of a probate process. When we represent clients in probates or trust settlements, we will work through these issues and give specific recommendations on each.

Understanding Probate Accountings

Our office routinely assists personal representatives in probate matters. We also assist trustees in settling revocable trusts. This post explains the financial reporting involved in those matters, and how we help our clients handle their responsibilities appropriately.

To keep this article simple, we discuss a probate process, in which the decedent leaves an estate, and the administrator is called a personal representative. When the decedent uses a revocable trust as their planning tool, the decedent leaves a trust, and the administrator is called a trustee, but the same reporting rules apply.

Trust Accountings for Ongoing Trusts

Our office routinely assists trustees in preparing accountings for ongoing trusts. This post explains what those accountings are and why they are important. It also gives some advice for trustees on making financial reporting as easy as possible.

Trust Accounting Basics

An ongoing trust is an arrangement under which one person is managing money for another according to a governing document. The person managing the trust is the trustee, and the person they are managing for is the beneficiary. The governing document explains how the funds are to be used.