The IRS recently issued regulations that affect the reporting responsibilities of an estate executor or administrator. If an executor is required to file a federal estate tax return, they must also file with the IRS a separate form stating the value of certain items included in the decedent's estate. Each beneficiary who receives property from the decedent must receive information regarding the property he or she receives or could receive. This requirement applies to all estates if the required estate tax return is filed after July 31, 2015.
The form is Form 8971, Information Regarding Beneficiaries Acquiring Property From a Decedent, along with a separate Schedule A for each beneficiary receiving property from the decedent. A copy of the relevant Schedule A must also be furnished to the beneficiary named in the schedule. Form 8971 and Schedule A must include all property (with certain minor exceptions) included in the decedent's estate for estate tax purposes, even if that property is disposed of outside of the decedent's will and outside of the probate process (for example, property held in joint tenancy that passes to the surviving tenant automatically or an IRA that passes pursuant to a beneficiary designation).
The due date for filing Form 8971 (and providing each beneficiary with their Schedule A) is the earlier of 30 days after the due date for the estate tax return (including any extensions granted) or 30 days after the estate tax return is actually filed.
Mr. Hendel has been practicing wealth preservation planning for over thirty years.