We have bank accounts and home titled in the name of the revocable trust of which we are both trustors/grantors. Since my husband passed away last year, Do I need to file anything separately for the trust or for him (assets in the trust are well below 1 mill) . Do I file my taxes jointly this year? Since I am the sole trustee of the trust now, does it remain fully in my control. It was suggested to me that I should amend this trust or perhaps do a new one in just my name (the old trust is called John doe and Jane Smith Rev. trust).The trust language indicates that the surviving trustee/grantor has full power to amend, revoke and administer the trust. Only the disclaimer trust is irrevocable and I have not disclaimed any assets.
You need to speak with an attorney who can review the Trust and advise you as to what needs to be done as a result of your husband's death. It is possible that your husband's share of your assets are now held on an irrevocable trust or they might be held in a trust that is revocable and and amendable by you. In order to properly advise you, an attorney must review the terms of the trust. Even if all of the assets are now in a trust that is revocable and amendable by you, there are a number of steps that must be taken as a result of your husband's death.
See an attorney now. It can get more complicated if you wait to do so.
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This is a loaded question. In regards to tax filings, you can certainly file a joint return which would be your spouse's final year tax return (as either an individual or jointly).
You may also benefit by filing a form 706. You should seek the counsel of a competent CPA or estate planning attorney with experience in filing the 706. There are certain beneficial elections, including portability of the estate tax exemption, that the surviving spouse can take advantage of.
Depending on the terms and breakdown of the trust upon the first death, and whether assets have been allocated to additional subtrusts, fiduciary tax returns may need to be filed as well.
Your question as to whether you have full control of the trust depends on a few factors. It's not uncommon for two trusts to be established at the first spouse's death - typically called an A-B trust. You would likely be designated as the successor trustee, which would give you "control" over the trusts. If certain assets are meant to fund the B trust, there could be certain limitations regarding your "control" over the funds.
I would recommend visiting an estate planning attorney to review the trust and sort this our for you.
I'm terribly sorry for your loss. Attorneys Henry and Symons provide sound advice. I would add that if there was income, there is joint and several liability for the spouses who sign and file a married filing joint return. That is, your husband's estate would be liable on any income tax, but so would you (unless you qualify for innocent spouse relief to reduce your personal burden). The law requires that you file a final income tax return for your husband through his date of death to report income. You should speak with a competent attorney who can advise you on whether you should file two married separate income tax returns for tax year 2012 (one for each of you) or a married filing joint tax return. There are benefits and disadvantages to both, so I suggest speaking with an expert who can fully ascertain your goals and objectives.
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Although your inquiry relates primarily to income taxes, the death of a real property owner has to be reported to the County Assessors where property is owned. Revenue and Taxation Code section 480 requires that a Death of Real Property Owner statement be filed within 150 days of the date of death by the trustee. It is best to get this done to avoid any potential penalties - although I don't think any will apply at this point. If you inherited his half of the property through the trust, the property should not be reassessed because there is an interspousal exclusion from reassessment. (Rev. & Tax. Code section 63)
This is not a formal legal opinion. This opinion is preliminary because no documents have been reviewed and the facts stated in the question may not include all of the facts necessary to determine the correct answer. This opinion is not intended in any way to be a substitute for consulting an attorney directly to obtain legal advice on the particular issues presented by this situation.
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