Legal Question in Wills and Trusts in New York
Taxes,etc.on income earned after date of death.
My brother passed away in early 1999,in NYC. as of 9/12/02 his will has not been finalized. In his will he instructed the ex. to arrange with his (my brothers) agent to distribute any royalties earned on his writings,plays etc. to his siblings. We have received two payments from the agent this year. My question is this. Do any royalties and/or other monies earned after his date of death become a part of his estate and subject to estate taxes and executor commission . In a recent summary of the estate it listed income received from the date of death thru 1/31/02 from interest & dividends, capital gains and royalties on which Federal and NY State fiduciary income taxes as well as a executors commission were paid. I would think that any royalties earned after the date of death would not be part of the estate but would be distributed per the will. Thank you for your considering this.
1 Answer from Attorneys
Re: Taxes,etc.on income earned after date of death.
I assume that when you say that his will has not been finalized you mean that the administration of his estate has not been completed.
The value of the royalties at the date of death is included in the taxable estate for estate tax purposes. The estate tax attributable to that value is claimed as an income tax deduction as the income stream is collected. This is complex stuff.
The executors are to distribute the estate assets as swiftly as feasible. Usually final distribution is delayed until the IRS issues a letter to the effect that all estate taxes have been paid or provided for.
During the administration of the estate the executors are entitled to commissions on amounts collected. They also pay income tax on the income collected and retained by the estate through the end of the tax year in which collected.
Eventually you and your sibligns will receive an assignment of the royalty rights and receive the revenue directly from the payor.
Be patient, it takes time; and all heirs become anxious.
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