In maryland, what are estate lawyers requirements? Do they help process the estate and estate income tax?

Asked over 1 year ago - Annapolis, MD

We were not told of the estate income tax, I'm not sure if we were responsible for it or the estate lawyers. I know the estate is responsible for payment but are the estate lawyers responsible for the preparation of that tax form?

Attorney answers (4)

  1. Daniel C Carroll

    Contributor Level 9

    4

    Lawyers agree

    Answered . Most estate attorneys do not do the tax returns and will point you in the direction of an accountant to handle for the estate. It is not just the federal estate tax return you need to take care of, as there is a Maryland Estate Tax return that need to be done as well and the Maryland Estate tax kicks in at a lower level than the federal estate taxes. Note that 'estate taxes' are different from inheritance taxes. Inheritance taxes are on the probate estate (if they apply) while estate taxes are on the gross taxable estate.

  2. Edward Samuel Clay

    Contributor Level 7

    2

    Lawyers agree

    Answered . Some will and some won't. It is important for the attorney to set forth at the outset of representation just what services will be performed and what services will not. In my practice, I don't prepare income tax forms, but, in most circumstances, I have prepared estate tax returns as part of representing the estate. I am not aware of any "requirements" other than disclosure of the services offered.

    Even if the attorney does not prepare the returns themselves, the attorney should assist the personal representative or trustee to gather the proper documentation to allow the accountant to prepare any required returns.

    Any answer provided in this forum is not offered as legal advice upon which you can rely without further... more
  3. Steven M Zelinger

    Pro

    Contributor Level 20

    2

    Lawyers agree

    Answered . Very good question. I would assume there is an engagement letter that outlines the terms of engagement. Many estate administration lawyers do not do the 1041s, but some do. Personally I believe executors are better served using a CPA with experience with 1041s because of the particular expertise involved and it is more cost effective (attorney hourly rates are usually more than CPAs).

    This is not legal advice nor intended to create an attorney-client relationship. The information provided here is... more
  4. Kelly Ann Grafton

    Pro

    Contributor Level 4

    Answered . As others have explained, some estate planning attorneys will help prepare these forms, and others won't. Generally, I prefer to refer the personal representative to a qualified CPA or tax attorney for assistance with this. Depending on the size of the estate, you may not need to file any estate tax returns (Maryland or Federal). Keep in mind that certain life insurance proceeds may be part of the estate (a common misconception) and can often push an otherwise small estate over the threshold that requires estate taxes to be paid. Good luck to you.

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