Wynnewood Pa Estate Taxation Lawyers
When an individual acts in a fiduciary capacity such as a Pa Executor of a Pa Last Will or a Pa Trustee of the financial assets of another person or entity, they have the responsibility of keeping accurate financial records.
Those records should show how money was spent, invested or distributed while under the fiduciary’s care and control. Proper accounting can bring to light the mismanagement or bad investment of funds should an issue arise with an interested party.
Interests Served
There can be a number of interested parties who may want to examine the financial records and approved fiduciary accountings. They are entitled to receive copies of all the materials such as profit and loss statements, expense reports and tax returns. You may request documentation if you are:
- a beneficiary of an estate or trust
- a principal of an agent acting on your behalf
- a minor whose care is being administered through a third party fiduciary agent
- the court who must evaluate financial matters in relation to a trust or estate
Approved Fiduciary Accountings
Certain procedures must be followed when reports are prepared to explain how the assets in an estate or trust were managed. Approved fiduciary accountings require the separation of principal and interest. You can not commingle funds that are considered principal with those that are considered income.
- Principal = original investment + capital gains – capital losses – expenses – distributions
- Income = money generated from the investment or use of principal
The main reason for keeping principal and income in separate accounts is that the beneficiaries of income in a trust or estate may be different than the beneficiaries of the principal in the same estate or trust.
Fiduciary Tax Returns – Form 1041
A trust or an estate is considered a separate legal entity from an individual who may be a beneficiary of that trust or estate. Therefore, it is incumbent upon the fiduciary administering the estate or trust to file a federal tax return under certain conditions.
The IRS requires a trust to file a tax return if it has any taxable income or has gross income of at least $600, regardless of whether it is taxable or not. Estates must file Form 1041 if they have gross income of $600 or more. A fiduciary must also file a return if any of the beneficiaries of the estate or trust is a non-resident alien.
Form 1041 is similar to the 1040 return used by individuals. The form is designed so estates and trusts can report income, deductions, gains, losses and any other pertinent financial information. Before funds or assets can be distributed, any tax liabilities of the estate or trust must be satisfied.
Closing Out a Fiduciary Relationship
Once all of the assets of an estate or trust have been distributed or otherwise settled, it is customary that the fiduciary is released from further responsibility. That may be done by signing a release form through the court or an agreement with the beneficiaries of the estate or trust.
Dealing with estate taxation can be complex. Estate taxation attorney John B. Whalen, Jr., provides guidance to his clients when dealing with these complicated issues.
About Wynnewood Pa Probate Lawyers
John B. Whalen, Jr., JD., LL.M., is an AV Peer Review Rated Preeminent 5.0 and Avvo Rated 10.0 Superb (obtaining over 95 client reviews and peer endorsements) premier and prestigious Attorney and Counselor at Law. He is located at 1199 Heyward Road Wayne Pa 19087. He serves all surrounding counties, on all 7 days, from 9:00 AM to 10:00 PM, and on evenings, weekends, and holidays. He provides free initial consults all seven days, provides home visits, and provides flat fee structures. He can be reached by email at jw60297@me.com, and by telephone at 1-484-417-6244. He has amassed over 60 prestigious and premier professional awards and over 5000 client reviews and endorsements.
Practice Areas
He concentrates his three decade career in the legal areas of Pa Probate, Pa Estate Planning (including Pa Last Wills, Pa Powers of Attorney, Pa Living Wills), Pa Estate Administration, Pa Estate Taxation, Pa Estate Litigation, Pa Beneficiary Representation, and Pa Guardianships.
Mr. Whalen has over 3,967 LinkedIn Profile Followers. 99 LinkedIn Peer Endorsements. 27 Avvo Peer Endorsements. 24 Martindale Peer Reviews. 12 Lawyers Client Reviews. 68 Avvo Client Reviews – over 5,000 Reviews
Mr. Whalen has achieved the AV Peer Review Rated Preeminentaward from Martindale, AV Peer Judicial Preeminent award, the Avvo Rated Superb 10.00 award, the Avvo Rated Top Lawyer award, the Clients’ Choice Award, and the Top One Percent (1%) award.
He is the recipient of the Legum Magister Post-Doctorate Degree (LL.M.) in Taxation (from the Villanova University School of Law). He is a recipient of the American Jurisprudence Award in Wills, Trusts, and Estates, from the Widener University School of Law). He is a recipient of the ABA-BNA Law Award for Academic Excellence (from the Widener University School of Law).
He has also been named as an Awesome Attorney in the field of Estate Planning Law (by the Suburban Life Magazine of the Philadelphia suburbs) for the years 2010 through 2018, and was Editor-in-Chief of the Delaware Law Forum at Widener School of Law.
Curriculum Vitae
Mr. Whalen is a frequent speaker and writer on the areas of Probate, Wills, Trusts, Estates, and has spoken for the Pennsylvania Bar Institute, spoken at the Widener University Osher Lifelong Learning Institute, and spoken at the Delaware County Estate Planning Council.
He has also had his legal articles published by the Pennsylvania Bar Institute, the Pennsylvania Law Weekly, the Philadelphia Business Journal, and the Martindale.Com website. He has had his law blogs published on the Lawyers.Com website.
Mr. Whalen is a member of the Pennsylvania Supreme Court and the United States Federal Court for the Eastern District of Pennsylvania.
He is past president of the Delaware County Estate Planning Council, a past Internship Instructor of Conestoga High School, and Villanova University School of Law. He is a past member of the Chester County Estate Planning Council, a past President of the Chesterbrook Picket Post Condominium Association.