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DEAR TRUST OFFICER:
My brother recently died tragically, survived by three children. Now I’ve been informed that in his will my brother named me as trustee for a trust for the three kids! He never mentioned it to me, and I don’t want to take on a job I know nothing about. I suspect that my brother thought it would be a great honor, an expression of his faith in me. I guess I’m flattered, but can I get out of this assignment? Or do I really have to just find time in my busy life for yet another duty?—POTENTIAL TRUSTEE
DEAR POTENTIAL:
Trusteeship is a voluntary undertaking. You are not the trustee of this trust yet, and you won’t be until the will is probated. The probate court will ask you if you accept becoming the trustee, and you are free to refuse. You need not give any reasons for your decision, as far as the court is concerned, but it would be more diplomatic if you shared your thoughts with the family.
You are wise to be wary of this responsibility. The duties of a trustee are considerable, and not to be taken lightly. This is why trustees are paid fees for their services, which include detailed recordkeeping, asset management, tax filings, and reporting to beneficiaries. What’s more, some trusts may empower the trustee to exercise nonfinancial judgments, as in withholding distributions from a beneficiary who develops a substance abuse problem, or advancing distributions for specified situations or emergencies.
Naming a family member as a trustee is not unusual, and sometimes it works out well. However, you should have been asked about shouldering this important task.
Article ©2025 M.A. Co. All rights reserved. Used with permission.
Each year the IRS identifies the top dozen tax scams for taxpayers to watch out for. The “dirty dozen” campaign was begun in 2002, and has evolved over time. More and more, the internet has become the vector for bad actors and bad tax information. The list:
• Email phishing scams, also including “smishing,” which is phishing via texts on a smartphone.
• Bad social media advice, including specifically on TikTok.
• IRS Individual Online Account help from scammers—third parties are not needed to estate an Individual Online Account.
• Fake charities.
• False Fuel Tax Credit Claims, which is only allowed for off-highway business and farming uses.
• Credits for Sick Leave and Family Leave, which were only allowed in 2020 and 2021 during the pandemic.
• Bogus self-employment tax credit.
• Improper household employment taxes.
• The overstate withholding scam.
• Misleading offers in compromise.
• Ghost tax return preparers, which includes any tax preparer unwilling to sign the return or include the IRS Preparer Tax Identification Number.
• The new client scam. This one is aimed at tax professionals, rather than at the general public. The scammer pretends to be a potential new client via email, and will include a malicious attachment to the email which can compromise the tax professional’s computer systems. The scammer may then access client information to be used for fraudulent refund claims and the like.
For more information on these and other scams related to taxes, visit the IRS website.
Article ©2025 M.A. Co. All rights reserved. Used with permission.
First off, an important reminder to all Social Security beneficiaries. The Social Security Administration announced that paper checks for benefits would end by September 30, 2025, although the new policy was later modified. The goal is that after that date, all benefits will be paid electronically. Electronic payments will be more secure, not vulnerable to theft by mail, and they are also cheaper for the government to process. Beneficiaries who have not yet set up electronic payments may do so on the Social Security Administration’s website (ssa.gov) or by asking their financial institution to send the required direct deposit information to the Social Security Administration. For more information, call the National Teleservice Center at 1-800-772-1213 or the local field office at 1-866-716-9671.
However, after concerns were raised in mid-July about the policy change, the rule was softened. Paper checks will continue to be available after September 30 for the small number of beneficiaries who cannot establish electronic accounts. No benefits will be cut off, but the Social Security Administration will work proactively with anyone still getting paper checks to help them transition to the new program. If you haven’t yet set up electronic deposits of your Social Security benefits, today might be a good day to start the process.
Next, what happens to Social Security benefits if a retiree needs help with financial management? The benefits may be paid instead to a “representative payee,” who must use the money to meet the beneficiary’s current needs and is accountable to the Social Security Administration for doing so. Records must be kept of how the benefits are spent. The representative payee may be a family member, a spouse, a friend, or an organization, such as a nursing home or social service agency.
Each beneficiary may designate in advance up to three people who could serve as representative payees should the need arise. It’s optional, and can be changed or withdrawn at any time. An annual notice of advance designees is provided for review, in case circumstances have changed. The Social Security Administration evaluates the suitability of representative payees before beginning payments to them.
Visit the Social Security Administration at www.ssa.gov/payee/advance_designation.htm for more information on this topic.
Article ©2025 M.A. Co. All rights reserved. Used with permission.
Fay Rowland died on April 8, 2016. The federal estate tax return for her estate was due nine months later, but the executor of her estate applied for and received an automatic extension of time for the filing, making the due date July 18, 2017. Unfortunately, the extended deadline was not met, as the estate tax return was mailed on December 29, 2017.
Actually, Fay’s estate was not required to file a federal estate tax return at all, because her estate was less than the basic exclusion amount of $5.45 million in the year of her death. The only reason for the filing was to claim the Deceased Spousal Unused Exclusion (DSUE). In that way, unused exclusion amounts may be “ported” to the surviving spouse. Fay’s total estate was estimated to be $3 million, but the specific value for each of the estate’s assets was not included in the return. After taking into account charitable deductions and lifetime taxable gifts, the claimed DSUE was over $3.7 million.
Fay’s surviving spouse, Billy, died on January 24, 2018. Because he died after the passage of the Tax Cuts and Jobs Act of 2017, the basic exemption for his estate was $11.18 million, well over double that for Fay’s estate. Still, his estate was large enough that the DSUE was claimed, bringing his total applicable exclusion to $14,892,562. A net federal estate tax of $4,477,555 was timely paid.
The IRS audited the estate tax return for Billy’s estate, and determined that his estate could not claim the DSUE because a proper portability election had not been made. In the first place, the election was filed late. More importantly, the estate tax return as filed was incomplete, relying upon round numbers for the total value of the estate instead of the fair market value of each asset.
The estate turned to the Tax Court for relief, but did not find it there. Under these circumstances, a valid DSUE election had not been made, and the IRS determination was sustained (Estate of Billy S. Rowland v. Commissioner).
Article ©2025 M.A. Co. All rights reserved. Used with permission.
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