The IRS and Trusts

[pb4uski]

What you are looking at is for federal estate tax purposes, which is different from the estate that is subject to probate.... in your case the federal estate equals the trust plus any assets outside of the trust. The assets outside the trust are subject to probate unless they are under the small estate limit (which they are in your case).

I think the central question to the Form 1310 is what is subject to probate since the Form 1310 refers to court-appointed, etc.

In your case, probate would only apply to assets outside of the trust, which I presume is under the small estates limit... the trust's assets don't count. The pour-over will I think would be to probate but under the limit and the beneficiary of the pour over will is the trust. So any assets outside the trust would be transferred to the trust through probate if over the small estate limit, which doesn't apply in your case.

Then the trust distributes the trusts assets in accordance with the provisions of the trust.

I think in you case the answer to Part I is C since there is no surviving spouse nor any court appointed rep since the estate subject to probate is under the small estate limit. And then the answers to Part II are 1-yes (there is a will...the pour-over will), 2a-no (there is no court appointed rep), 2b-no (because assets outside the trust are under the small estate limit there will not be a court appointed rep) and 3-yes (the refund will be part of what the estate outside of the trust distributes to the trust in accordance with the pour over will).

Also, look at the example from post #2:

Example. Your father died on August 25. You are his sole survivor. Your father did not have a will and the court did not appoint a personal representative for his estate. Your father is entitled to a $300 refund. To get the refund, you must complete and attach Form 1310 to your father’s final return. You should check the box on Form 1310, line C, answer all the questions in Part II, and sign your name in Part III. You must also keep a copy of the death certificate or other proof of death for your records.

 

[ERD50]

....

I think in you case the answer to Part I is C since there is no surviving spouse nor any court appointed rep since the estate subject to probate is under the small estate limit. And then the answers to Part II are 1-yes (there is a will...the pour-over will), 2a-no (there is no court appointed rep), 2b-no (because assets outside the trust are under the small estate limit there will not be a court appointed rep) and 3-yes (the refund will be part of what the estate outside of the trust distributes to the trust in accordance with the pour over will).

Also, look at the example from post #2:

Look back at his post #12 - I think that is what they have done.

Look at my post #13 - I suggest Part 1 B, along with an Affidavit of Heirship. His sister is executor, and that's what 'B' refers to. That sounds like the key, but I bet a call to the Texas County office would clear it up.

Either way, 1031 asks for some form of documentation, now I see that for part C all you need is to retain a copy of the Death Certificate in case they ask for it, and they have that. I dunno, seems like that should do it then?

-ERD50

 

[pb4uski]

Look back at his post #12 - I think that is what they have done....

But Post #12 doesn't say how they responded to the Part II questions.

Also, I'm struggling to reconcile the difficulties that MidPack is having with the example in the instructions.

 

[Midpack]

But Post #12 doesn't say how they responded to the Part II questions.

Also, I'm struggling to reconcile the difficulties that MidPack is having with the example in the instructions.

[EDIT]My sister answered Form 1310 Part 1 and 2 exactly as you’ve recommended and they refused to send the refund. At this point we can only wait and see if the IRS honors her appeal?

I appreciate the clarifications re: what’s included in an estate for federal vs state. We’ll see if that comes into play, though I don’t see anything in the federal instructions that mentions anything about the small estate affidavit. But again, we’re waiting on IRS for now.

 

[pb4uski]

I suppose so... hopefully the appeal explained that a personal representative of the estate was named in his will but would not be appointed by a court because the decedent's assets were below the small estate threshold in the decedent's state of residence so no probate was needed... and that any refund would be paid out consistent with the decedent's will.

But her answers to the questions already told them that but without color.

 

[Gill]

The threads above are leading you in the right direction. Gross estate for Federal Estate Tax purposes has nothing to do with probate. It sounds as if the only asset you have subject to probate administration is the refund check. It appears to me you qualify for small estate administration.
Gill