Upon the passing of a loved one, family members must navigate not only the grieving process but an array of financial and legal responsibilities. For deceased individuals (decedents) who pass away in 2025 with a gross estate exceeding $13.99 million in value, filing a federal Form 706, or the Federal Estate Tax Return (estate tax return), is required, and there may be certain situations under $13.99 million where filing an estate tax return may be advisable. The estate tax return is a comprehensive summary of a decedent’s assets, liabilities, prior gifts, transfers and ultimately the decedent’s estate plan. Preparing and filing the return is the responsibility of the estate’s named fiduciary, typically the trustee, executor, or personal representative. The process can be complex and requires a great deal of attention to detail and time. One way to ease this burden on your family is to name a professional trustee as the fiduciary.
The role of the professional trustee
Professional trustees, often corporate fiduciaries, can play a pivotal role in managing the estate tax return filing. Their expertise helps ensure that the estate complies with federal tax laws while minimizing the risk of errors and potential penalties. There are four important ways a professional trustee can help facilitate the estate tax return filing process.
1. Asset inventory and valuation
The estate tax return requires reporting of the decedent’s assets, valued at the fair market value on the date of death. Oftentimes, there are unique and hard-to-value assets that need to be included. While often a daunting task for family members, professional trustees have experience dealing with valuations of unique assets. They can help locate the right appraiser or valuation experts to assist with obtaining value and use their experience to accurately and efficiently gather the necessary information for the estate tax return. For example, if a decedent has a unique collection of antiques, the professional trustee can contact the right valuation professionals who can provide reporting that meets the IRS requirements.
2. Communication with other professionals
The estate tax return requires communication with not only the person responsible for filing the return, but anyone with relevant information for its completion. This typically includes the decedent’s estate planning attorney, financial advisor, certified public accountant, insurance agents, real estate agents, banking professionals and, in some cases, IRS agents. If a family business is involved, this list can also include the company’s executive team and professional advisors. A professional trustee can efficiently identify the necessary parties and lead the coordination of communication among these individuals. This can take a tremendous amount of time and burden off the surviving family members, helping to ensure a smooth process.
3. Supporting families and beneficiaries
Following the death of a loved one, family members are grieving their loss while learning to navigate a new reality. Emotions are running high, often placing stress on the trustee or executor. Having a professional trustee serving in this role can help remove the emotional component of decisions and information gathering. This can be especially beneficial in scenarios where there are blended families, estranged family members, or unequal distributions of the estate. If information or decisions are needed for the return, the professional trustee can make them based on the facts and circumstances, helping to alleviate pressure on family members.
4. Technical tax elections and decisions
The estate tax return not only includes the summary of the decedent’s estate and distribution scheme but also requires several technical tax elections to be made when filing the return. These decisions are ultimately made by the fiduciary, who then in turn is responsible to the beneficiaries. Elections include where to take estate expenses, the use of generation-skipping transfer tax allocations, or the portability election. Professional trustees have the experience and technical skill to effectively make these decisions while simultaneously keeping the best interests of the beneficiaries in mind.
Ensure your legacy is protected
The federal estate tax return filing process is a critical component of your estate management, requiring precision, knowledge, and careful attention to detail. Professional trustees bring deep expertise to this process, ensuring compliance with tax laws, optimizing tax-saving opportunities, and reducing the emotional burden on your loved ones. If you have a complex estate, the assistance of a professional trustee is indispensable in coordinating the input of accountants, insurance, real estate, valuation, and other professionals. Let our professional trustees help guide you through your estate tax management. Reach out now to get started.
