Article Date:
December 2020

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Tax Considerations When a Loved One Passes Away (Part 1)

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


The now-deceased loved one may have been single or married, and may or may not have been a relative. 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, and handling tax matters is an important part of it. This article is the first of our three-part series on what you, as the executor, need to know about the most important federal tax issues. So please read this, and then stay tuned for Parts 2 and 3.


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


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” (the deceased loved one’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 will often be 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.


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