Generally within three months after an appointment, Personal Representatives must prepare an asset inventory under their administration at their date of death market value. While it is not required to file the inventory with the court, a person interested in the estate may request it after the three month period in which case the Personal Representative must produce it within ten days. The date of death market values of capital assets such as real property and securities determines their new adjusted basis for measuring gain or loss for capital gains tax purposes. This is usually an advantage. For example, if the decedent sold shares of stock purchase for $10 for $110 the day before death there would be tax on a gain of $100. If decedent gave the stock away the done would be stuck with the original $10 basis and receive no adjustment. However, if decedent holds the shares until date of death and they are worth $110 at that time that becomes their basis and the Personal Representative may sell them for that amount without realizing any capital gain.

A good piece of legal advice is to keep accurate records of all trust and estate transactions, and they need to be separate. Copies of all items deposited to the account should be made, and adequate descriptions of all deposits and checks written should be maintained. The records will provide the necessary information for preparation of the trust’s income tax returns and any accountings that may be required. This can get complicated, so if you have questions or would like assistance from Lyons Sullivan Lawyers, you can find us in Bellevue, WA.