Estate executors are required to file and pay any taxes due on an estate within nine months of the death of the estate owner. If more time is needed, a six-month extension can be obtained by filing the proper forms. The taxes are exacted on the gross estate, which includes any and all property owned by the decedent at the time of his or her death. In addition to real estate, bank accounts and stock, this also includes any real property owned outside of the United States and any interests in property.
For tax purposes, the term gross estate also includes any gifts or property transfers made during the decedent’s life that failed to meet the requirements of the laws governing such transactions. Other items included under the umbrella of gross estate include annuities, joint assets with right of survivorship, some community property, life insurance proceeds and property over which the decedent had the legal right to control.
Taxes are due and payable anytime the value of the gross estate exceeds the federal estate tax exemption. In 2019, this amount is $11.4 million per person or $22.8 million for a married couple. When the value of the gross estate exceeds that amount, the executor must file tax forms for the estate even if no tax is due.
Estate administration can become very complex, especially when the amount of the gross estate is large. Typical duties of an executor include paying off creditors, filing income tax forms and paying any taxes due. It is important to appoint the right person to administer the estate because an executor can sometimes be held personally responsible for mistakes. To make sure the right person is appointed, an estate owner might want to contact a law firm with experience in estate administration and probate.