Discussion:Trust created automatically?

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Discussion Forum Index --> Advanced Tax Questions --> Trust created automatically?


Discussion Forum Index --> Tax Questions --> Trust created automatically?

Ehhayden (talk|edits) said:

17 April 2014
Spouse of my client died in Dec, 2012. Final 1040 (MFJ) was done showing spouse deceased. In (for) 2013 surviving spouse receives 1099-R from insurance co (Lincoln Benefit Life) for $100K with taxable amount of $75K. Issued to the "Last name" Family Trust with a new EIN. Also received was a CP 575 B from IRS as a response to an SS-4. Trust name is "Last name" Family RVOC Family Trust and letter goes on to say that a 1041 is now required to be filed for it.

How did this come to be? Did the Ins Co file the SS-4? Verified with spouse's investment adviser who assures me that neither she nor her company (Wells Fargo) filed or requested such an assignment. And, though I said to the spouse "get thee to an attorney" she never did that. Don't think spouse knows enough to do it herself - she's mystified as well.

Is IRS letter binding? What about the income on 1099s assigned to the named trust but use the surviving spouse's SSN!

Could use some insight here! Any ideas?

... Ernie H.

Dennis (talk|edits) said:

18 April 2014
Basically deceased was sold a single payment tax deferred annuity. Death was a termination event and it paid off. Entirely possible asset protection trust was part of the contract. Deceased would have executed the paperwork to be filed on death. If investment adviser did not sell the policy get the appropriate documentation directly from Lincoln Benefit. Oddly, you make no mention of where the money went. Answer to your question depends on that.

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