Legal Question in Wills and Trusts in Nebraska

Re: time limits on tax filings for both state and federal taxes

What state are you talking about? I know Mass. law best, although I do know Federal Estate Tax law as well.

1. You should wait either 6 mo. or 9 mo. to file any inheritance tax return if there is any possibility that someone will "disclaim" an interest.

Disclaimer is a valuable and important tool. Learn more about it ... write to me with details (how many people are getting money under the will, how much money, what kind of assets are involved and whether there's a chance of lower valuation at the 6-month mark).

2. There is generally an advantage to waiting 6 months; if the value of total assets is lower by then than at date of death, and you are paying some tax, you can opt for the later valuation date and save some taxes (but you reduce the basis for people who inherit "in kind" (stock, for example) ).

3. You MAY NOT wait 1 year to file the federal return. You MUST file it on the 9 mo. anniversary of the date of death unless you get a certain 6 mo. extension, but even if you get the extension, you still have to pay the proper amount of taxes (or more) by the 9th month anniversary of the date of death.

4. Creditors of the estate might come forward at any time within the first year; if there's a probate estate (subject of another discussion, I guess), you need to have money available for that. This may have been your source of confusion. The taxes MUST get paid by the 9 month afterwards date, not 1 year.

Of course, it sounds like you don't think there are any creditors left unpaid.

If you are the executor, you can take a little gamble and pay out some portion of the money in advance. I do that sometimes. I'm personally liable if creditors rear their greedy heads after I've given away some of the estate.

By the way, are the assets all (or any?) probate assets?

Write privately to [email protected] , okay?