Legal Question in Wills and Trusts in California
Re: Probate, Tax liability of beneficiaries
I would like to find the I.R.S. tax for--name removed-- that states that beneficiaries involved in a probate can be held liable for "additional taxes" if claimed by I.R.S....under the following conditions: The proper for--name removed-- has been filed with the I.R.S. requesting "release of liability" of Executor. All funds fro--name removed-- estate have been disbursed to all beneficiaries, except for $5,000.00, which the Estate's Attorney is withholding fro--name removed-- distribution in case the I.R.S. audits the tax returns and finds some additional taxes due. The decedent died 1/29/97, and the distribution was made 3/15/98. the Executor is not holding any property of decedent and there does not see--name removed-- to be any fraud in filing the tax returns. The Attorney filed a request with the Court to withhold the $5,000.00 and was granted, but no time element was mentioned. I would like to know if this is a valid action on the part of the Estate Attorney. I hope that a bright lawyer out there someware can help with this situation.....thanks very much.
1 Answer from Attorneys
Re: Re: Probate, Tax liability of beneficiaries
It is standard procedure in a probate to hold a tax reserve in the event that IRS audits the estate and finds that additional taxes are due. The reserve also might be used for unexpected expenses, if that use has been approved by the court. An executor who does not maintain a tax reserve might wind up being personally liable for the additional taxes.
Stephen Gruber
Law Office of Stephen C. Gruber
4966 El Camino Real, Suite 101
Related Questions & Answers
Looking for something else?
10,200 active attorneys ready to answer your legal questions today.
Featured Attorneys
Earn additional revenue and grow your business.
