A quote often attributed to Benjamin Franklin is that the only sure things in life are death and taxes. As this blog has discussed previously, there are multiple responsibilities involved in being the personal representative for someone's estate. Along with dealing with any will or trust that exists, as well as the probate process and ensuring private creditors are informed about the proceedings, there is the issue of filing the proper forms with the federal government so that Uncle Sam knows he is getting his share.
According to the Florida Bar, the organization that governs attorney licensing in the state, there are several considerations that a personal representatives may have to take into account regarding taxes. There is the filing of the decedent's last personal tax return for the year of his or her death. Then, there are possible filings that may need to be made on behalf of the estate. These might include Form 1041, the estate tax form for the federal government; a gift tax return, if the decedent made any gifts prior to his or her death; and, if the estate is large enough to trigger the federal estate tax, Form 706. This list, of course is not exhaustive, and other forms may also be required. Further, if the decedent owed any prior taxes, they will likely need to be paid out of the probate assets of the estate.
While the State of Florida no longer has an estate tax, if a decedent owed intangible taxes prior to the repeal of that statute, those may also need to be paid by the estate. Normally, the estate will bear the burden of paying any taxes owed, but personal representatives should be advised that if they fail to pay them properly they may expose themselves to personal liability. For this, and many other reasons, anyone acting as a personal representative may wish to consider speaking with an experienced estate administration attorney.