The passing of a loved one can create feelings of stress and turmoil in those left behind. Cognizant of the emotional state of our clients and the sensitivities that arise during this difficult time, we strive to ease at least the practical side of loss for the survivors. At Troutman Sanders, we do so by offering general consultation and complete assistance with the estate and trust administration process. We work closely with financial advisors and others that serve our clients and their families to aid executors (and trustees, if applicable) with the complexities involved in estate taxes, probate court matters and the distribution of estate assets.
Many assets avoid probate at a person’s death because of trust ownership, beneficiary designation or joint titling. We work with clients to coordinate all assets at a person’s death, not just probate assets.
With the help of Troutman Sanders litigators, we also help resolve family disputes. We work with families to avoid litigation, but in some cases resolution can only be obtained through the courts.
Administration and Accountings
We routinely assist clients in administering estates in jurisdictions where we have private wealth management lawyers and in surrounding jurisdictions, including Connecticut, the District of Columbia, Florida, Georgia, Maryland, New Jersey, New York, and Virginia. We have worked to administer estates in a variety of other jurisdictions, as well, including ancillary jurisdictions where clients may own real property.
We will typically petition the relevant court to probate the decedent’s will, prepare required inventories and accounting, address issues that arise regarding a decedent’s will and any applicable trusts, respond to creditors’ claims, and advise on titling and estate or trust distributions. However, our involvement in estate administration varies widely among clients. Some clients prefer us to handle everything involved in the process. Other clients prefer to handle most duties on their own and only seek our assistance in very limited aspects of the administration process. Most often, we will strike a balance and allocate the various responsibilities based on efficiency, the client’s ability to handle administration obligations on his or her own, and the client’s budget.
Estate Tax Returns
We prepare a decedent’s estate tax return, due nine months after death. This return determines the decedent’s taxable estate and can allocate the decedent’s remaining unified credit and generation-skipping transfer tax exemption where possible. A state estate tax return would also generally be due at the same time. The due dates can be extended for six months.
Under the new federal portability law, the estate of the first spouse to die must file an estate tax return in order to preserve the estate tax exemption of that spouse for the surviving spouse to use. Even if no estate tax return would otherwise be required (if the deceased spouse’s assets are under the federal exemption), an estate tax return should be considered to protect what could be a valuable asset: the estate tax exemption of the deceased spouse.
We work with clients on preparation of estate, gift and generation-skipping transfer tax returns, including the following:
- Tax planning regarding asset valuations
- Tax elections to maximize the efficient use of all exemptions available
- Exercise of certain rights that various persons may have in the estate (including powers of appointment and disclaimers)
- Minimization of eventual estate and generation-skipping tax at the death of any surviving spouse; and
- Income tax planning involving the funding of estate shares and trusts
We also work with client-retained accountants to ensure that the decedents’ final income tax returns, and income tax returns relating to the estate and certain trusts, are properly prepared. We work to maximize the efficiency of deductions, optimize the income tax basis of assets, and plan for timing of income items.
We also represent clients before the IRS in estate and gift tax audits and, when necessary, represent clients in the U.S. Tax Court and other federal courts on matters involving significant tax disputes.
Fiduciary Income Tax Returns
We regularly represent fiduciaries throughout the estate administration process, including dealing with tax issues and working in tandem with clients’ accountants to prepare the appropriate tax returns.
Probate, or the legal process of transferring property upon a person’s death, can be long and complicated. Before death, clients often can avoid probate with revocable trusts. We help executors and administrators navigate the intricacies of this system and settle the portion of an estate that passes through probate. We guide executors and administrators through the processes involved in paying all debts and claims, collecting all rights to income, settling any disputes, and distributing the remaining property to the heirs. Throughout these processes, our lawyers call upon their experience within the court system to help alleviate any additional stress on the parties involved.