Family member death - Tax Filing and Retirement Accounts

[Anonymous]

Anonymous wrote:

Everything starts with getting the death certificates. You might need additional copies.

For insurance policies, 401K’s, Roth IRA’s that you are the named beneficiary, you need to reach out to those companies and they will move the $ to you. Each will have a different requirement as to what documentation they require. Those assets can be transferred to you but with the 401K’s etc will have to go into a new account. Be aware of RMD’s etc, rules changed in 2020…

In VA, you will need to file for probate for the county/city that your family member lived. Probate in VA is via state law but each jurisdiction handles intake differently. It takes a a couple of weeks to be sworn in as an executor. You will file an intake form and then have to notify heirs within 30 days. Within 4 months you will have to certify you notified heirs and submit an inventory of assets. You will file taxes and estate taxes. Assets that moved to you via POD/TOD and insurance are not declared but any $ in checking and savings that moved to you have to be reported. Furniture, clothing, etc have to be reported.

Initially, you need to get you arms around the assets. Any property, bank accounts, retirement accounts, cars etc

Then you are going to need to create an EID for the estate and open an estate account for the deceased. This is what you will file taxes on and pay bills. Initially you may be paying some bills out of pocket as an executor since it takes time to get sworn in as executor and create an estate account. Keep records of everything. Do not co mingle $.

Good luck, there is a lot of paperwork. It sounds like the estate you are handling is pretty simple which is good.

^^This.

There is otherwise mostly a lot of bad advice in this thread.

Note that you will need to file the final year return for the deceased’s personal income taxes as well as taxes for the estate as a separate entity. If you don’t have a handle on their 2022 taxes, I’d file for an extension.

Also, I am an attorney and am pretty competent at doing my personal taxes and I had to hire an accountant for an estate tax return. The rules are very complex and mistakes can be expensive. If the estate isn’t complex, it shouldn’t be too expensive, but this is one case where a professional can save you a lot of hassle later on.

[Anonymous]

Anonymous wrote:OP, whoever is filing taxes for the deceased - it can absolutely be you - must report anything over $16k on form 709 - so long as it is less than $12M - no taxes owed.

You can get management of retirement accounts - need to call each of them and let them know of death - they can help with next steps. Yes, you don't need a lawyer or accountant. It seems in your case it is fairly simple.

No — reporting requirements for the annual gift exclusion do not apply to an inheritance. Only the lifetime exemption amount matters for estate tax purposes.

Please don’t take accounting advice from this forum.

[Anonymous]

Anonymous wrote:

Anonymous wrote:OP, whoever is filing taxes for the deceased - it can absolutely be you - must report anything over $16k on form 709 - so long as it is less than $12M - no taxes owed.

You can get management of retirement accounts - need to call each of them and let them know of death - they can help with next steps. Yes, you don't need a lawyer or accountant. It seems in your case it is fairly simple.

No — reporting requirements for the annual gift exclusion do not apply to an inheritance. Only the lifetime exemption amount matters for estate tax purposes.

Please don’t take accounting advice from this forum.

Or at least take it from a CPA.

The annual gift tax exclusion is now $17K for 2023.

[Anonymous]

https://www.vba.org/page/guide_estates

This is a good site with an overview of the process in Va. I am going thru this now and I find I have had to a lot of searching on the internet to find answers.