The Law is very strict on Probate Court and Tax Deadlines for Trusts and Estates and you must meet all the rules of probate court deadlines to avoid being removed as executor or trustee and to avoid a fine or even a jail sentence can be imposed. File income tax returns, Form 1041, and estate tax returns, Form 706, on time. Do not miss a single key deadline, place all the probate court and tax filing deadlines prominently on your calendar. You may however seek tax filing extensions in some cases, amend incorrect returns, and file protective claims in case this becomes necessary.
Probate court deadlines
Make sure you place all the probate court’s deadlines on your calendar where you will see them and not forget. Circle, or write in bold if needed. Even if you haven’t been able to complete what was set by the court, like preparing the inventory, for example, at least show up in probate court to explain as to why you were unable to comply. This usually buys you some additional time to comply. However if you fail to show up the court may demand that you comply right then and there.
Don’t make a mistake and think that the probate court isn’t a real court or the judge not having the power of a real judge just because proceedings have been nice and smooth so far. Probate court judges do have full judicial authority, including removing you as executor or trustee, fining you, they can even throw you in jail for contempt of court, or any other sanctions they feel necessary.
Probate Court tax filing deadlines
You wouldn’t miss doing your own taxes on time so don’t forget to file the trust’s or estate’s tax either. Income tax returns (Form 1041) are needed three and one half months after the estate or trust’s year end and estate tax returns (Form 706) are due nine months from the date of the death.
Place income tax return and estate tax return due dates in plain sight on your calendar. Begin the preparation long before the due date, so you know about any difficulty or missing information long before the filing deadline.
Don’t forget, extensions are available if you’re unable to file returns by the due date, and you may amend the returns that turn out to be incorrect after.
If you know you can’t possibly get all the information prior to the due date, and you extended that date by the maximum six months?
If you know it’s just a matter of a few months, or a year, you will probably be okay with just amending the return after you have all the pertinent data.
If what’s missing may take longer to acquire, such as litigation begun during the deceased’s lifetime, you may want to suspend the statute of limitations indefinitely until you resolve what the outcome of that will be.
To protect yourself, write “Protective Claim under Reg. Sec. 301.6402-2(2)” across the return in big black letters. Make sure you pay all the taxes due. Be sure to file your return on time (as extended). Protective claims work only if every other aspect of the return you have filed has been correct and in good faith. Follow these rules and guidelines and you should not have any issues with Probate Court and Tax Deadlines for Trusts and Estates.