Article Date:
January 2021

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Tax Considerations When a Loved One Passes Away (Part 2)

A financially comfortable loved one has passed away. In this year of seemingly endless bad news, that’s not an uncommon situation—sad but true.


The now-deceased loved one may have been single or married and may have been a relative or not.


In any case, you’ve stepped up to the plate and taken on the challenging job of acting as executor for the deceased person’s estate. Good for you.


But it can be a lot of work, including handling important tax matters. This article is the second of our three-part series on what you, as the executor, need to know about the most important federal tax issues. For Part 1, see Tax Considerations When a Loved One Passes Away (Part 1).


Note. There may be state tax issues too, but those are beyond the scope of our analysis here.


The Executor’s Role


When a loved one passes away, someone must handle the resulting financial fallout, including the tax issues. That person may be identified in the “decedent’s” (deceased individual’s) will as the executor of the decedent’s estate.


If there is no will, the probate court will appoint an administrator.


In either case, it’s often the surviving spouse or another family member who takes on the responsibility. In this article, we will refer to that person as the “executor.” That would be you!


Your role as the executor is to identify the estate’s assets, pay off its debts, and distribute the remainder to the rightful heirs and beneficiaries.


You are also responsible for filing any necessary tax returns and arranging to pay any taxes. We covered some of the most important tax issues in Part 1 of our analysis. This article presents the rest of the story. Here goes.


Choose Tax Treatment for Decedent’s Medical Expenses


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