What potential income tax issues do I need to be aware of when implementing an estate plan in California?

As the trustee of a California trust or the executor of the estate, there are several potential income tax concerns of which you must be aware. Tax matters are often intimidating for trustees or executors without experience serving in these roles. Fortunately, you do not have to navigate the administration of a trust or estate alone. An experienced Anaheim trust lawyer can help guide you through the process.

When considering the potential income tax issues that may arise during a California trust or estate administration, executors and trustees must pay attention to the following:

  • Whether a final federal income tax return needs to be filed.
  • Whether a final state income tax return needs to be filed.
  • Whether the trust is required to file a federal or state income tax return.
  • Whether the estate is required to file a federal or state income tax return.
  • Whether any of the trust or estate assets are entitled to a step-up in basis.
  • Whether the income taxes must be paid from the funds of the trust, the probate estate, or some combination of the two.

Waiting to file and pay federal or state income taxes can result in hefty fines and penalties. As a result, the trustee or executor may need the assistance of an experienced Anaheim trust lawyer, a qualified tax preparer, and other financial advisors. For assistance carrying out your obligations relating to income taxes, contact our office of experienced Anaheim trust attorneys today. Call us at (714) 459-5481 for a consultation.

James F. Roberts
Founder and owner of the Law Office of James F. Roberts and Associates, a premiere estate planning law firm