Executor of will owes money to the IRS

George SaenzQuestionDear Tax Talk,
My mom recently died (June 2011), and I am the executor named in her will. She has several IRAs, and I have been told to get a tax ID number. My concern is that I owe taxes to the IRS. How will this affect the money my mom has in her IRA? Should I get another sibling to be executor of the account that does not owe taxes? I am on a payment plan and will pay in full once my share is distributed from the IRA.
-- De

AnswerDear De,
Your personal tax debts do not interfere with or attribute themselves to the assets of your mom's estate either by your interest as a beneficiary or your position as the executor of will. Generally, you would apply for a tax identification number for the estate if it will go through probate or have income.

An IRA usually has a beneficiary designation. When the IRA owner dies, the beneficiary designation controls the disposition. For example, your mother's IRA may say that all or part of the IRA should be paid to her child(ren). Because the IRA passes directly to the beneficiaries, the estate would not include them in income. Each beneficiary is responsible for including the IRA in their income when distributed.

If IRAs are her only assets, then there is no need for probate as the assets pass through designation. Because probate costs money, you could avoid this expense by not opening an estate proceeding unless other assets are involved. If there are other assets or probate, then it would be appropriate to apply for a tax identification number on Form SS-4. You should also complete and file Form 56.

The primary duties of a personal representative are to collect all the decedent's assets, pay the creditors, and distribute the remaining assets to the heirs or other beneficiaries. While this sounds simple, it can get complicated, so I highly recommend you hire a good CPA and attorney to help you through the probate process.

Ask the adviser

To ask a question on Tax Talk, go to the "Ask the Experts" page and select "Taxes" as the topic. Read more Tax Talk columns.

To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advice contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein. Taxpayers should seek professional advice based on their particular circumstances.

Bankrate's content, including the guidance of its advice-and-expert columns and this website, is intended only to assist you with financial decisions. The content is broad in scope and does not consider your personal financial situation. Bankrate recommends that you seek the advice of advisers who are fully aware of your individual circumstances before making any final decisions or implementing any financial strategy. Please remember that your use of this website is governed by Bankrate's Terms of Use.


Show Bankrate's community sharing policy
          Connect with us
Product Rate Change Last week
30 year fixed 3.80%  0.02 3.78%
15 year fixed 3.04%  0.04 3.00%
5/1 ARM 3.14%  0.02 3.16%
View Rates in your area Next
Product Rate Change Last week
30 year fixed refi 3.88%  0.03 3.85%
15 year fixed refi 3.13%  0.04 3.09%
10 year fixed refi 3.14% --0.00 3.14%
View Rates in your area Next
Product Rate Change Last week
60 month used car loan 2.68%  0.03 2.65%
48 month used car loan 2.76%  0.02 2.74%
60 month new car loan 3.11% --0.00 3.11%
View Rates in your area Next
Product Rate Change Last week
1 Year CD 1.08%  0.01 1.07%
2 Year CD 1.18% --0.00 1.18%
5 Year CD 1.77%  0.01 1.76%
View Rates in your area Next
Product Rate Change Last week
Balance Transfer Cards 15.87%  0.01 15.86%
Cash Back Cards 16.37% --0.00 16.37%
Low Interest Cards 11.10% --0.00 11.10%

Our tax expert Kay Bell provides resourceful tips and advice to help you stay prepared for filing.



Kay Bell

IRS catches millions of math mistakes

Apparently Americans can't add, subtract, multiply or do other math, at least not when working on their tax returns. Last year, the IRS caught 2.3 million math mistakes.  ... Read more

Partner Center

Connect with us