Taxes for decedant

[markrweiss]

I'm the executor for my cousin's will.  He passed in August of 2023, and he had many stock accounts with a financial institution, all of which were to be distributed on his passing.  The individuals he had left accounts to have all been distributed, but there are several charities he designated the remaining accounts to and the financial institution has not distributed money to those charities yet.  It's now been a year since his passing and the balance of those accounts is nearly one million dollars.  The accounts were to be transferred on death to the  charities named as beneficiaries.

Should the account holder (the financial organization) be responsible to make the distribution?  How long can they hold the stocks after my cousin passed away?  And most importantly, do I have any responsibility to ensure the money is distributed?  I contacted all the individuals and gave them the information to claim their inheritance, and I also contacted many of the charitable organizations to help them get their money from accounts, but I just received a statement from the financial institution that they still hold well over $950,000.

Is the estate responsible for 2024 taxes own monetary gains that haven't been transferred at the time of his death?

[M-MTax]

Probate? Sticky situation and a tax pro....a tax attorney in the state where decedent passed should be consulted.

Could be that's what the financial institution is waiting for.......court order.

Also this is too much money to mess around with. Get a local lawyer.

[M-MTax]

Is the estate responsible for 2024 taxes own monetary gains that haven't been transferred at the time of his death?

Either the estate is responsible or you can pass the gains along to the benes, if allowed by the will.

As far as the charitable distribution, there's no deduction for that unless the contribution comes from the income of the estate OR if you have to file a 706. For love or money, get a lawyer for this. The legal fees can be paid out of the estate's assets and you have an obligation to seek assistance from a professional if it is warranted by the circumstances......And IT IS here!

[M-MTax]

 And most importantly, do I have any responsibility to ensure the money is distributed? 

Yep........you're the executor and must use your best efforts and prudent judgment. If state law allows, you can resign as executor and then usually the probate court......with permission.....will appoint a replacement.

[dmertz]

Accounts such as retirement accounts or transfer-on-death accounts that have beneficiaries other than the decedents estate are not your responsibility as executor other than to inform the financial institution(s) of the death and to provide a death certificate.  Such accounts become maintained for the benefit of the designated beneficiaries immediately upon the death of the account owner, so the beneficiaries are responsible for the taxes on any post-death income in the account.  These accounts are not part of the probate estate.  The only effect they have with respect to the decedent's estate is the amount they add to the gross estate when determining if the estate is subject to federal or state estate taxes.

A delay in informing the financial institution could result in the financial institution issuing Forms 1099 to the estate for post-death income when these forms really should go the the account beneficiaries.  This might necessitate using the nominee process to forward these forms to the beneficiaries.

Accounts that have the estate as beneficiary, possibly by default if no beneficiary is designated, would be your concern as executor until liquidated by the estate or distributed out of the estate subject to the terms of the will.

It's not clear why you would be receiving any account statements for accounts that have designated beneficiaries where you have informed the financial institution of the death.  The financial institution should be dealing with the account beneficiaries.

[M-MTax]

It's not clear whether "The individuals he had left accounts to" meant that the accounts were left via the will or whether they were something like TOD accounts. @markrweiss should clarify that point.