Does a living/grantor trust become a simple/complex trust after the grantor dies? (Form 1041)

[grapegrower]

The grantor of a living trust is now deceased. The trust now has it's own EIN. Most of the trust assets were distributed to the beneficiaries in 2023. I am trying to understand the correct trust type(s) to check on Form 1041. Is it correct that while it was a grantor trust (when the grantor was alive), it is considered a complex trust now since assets were distributed in 2023? Does the grantor trust box also need to be checked?

[DMarkM1]

Yes, once the grantor passed a new irrevocable trust was created and income/distributions are reported on the form 1041. Since assets were distributed in the tax year, the trust is complex and no, it is not a grantor trust.  

Remember you have the choice to file using the calendar year or a fiscal year.  If all the trust business was completed by 31 Dec then you should use the calendar year and indicate "Final Return."  If the trust business is expected to be completed within 12 months of the date of death, then you can use the fiscal year (date of death plus 12 months) and file one and final 1041 within 4.5 months after that fiscal year ends.  

[grapegrower]

Thank you for such a well explained response. It was very helpful.