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In California probate law...my cousin died, I am executor.

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Estate is less than 150k...
In California probate law...my cousin died, I am executor. Estate is less than 150k and most of her retirement annuities have beneficiaries intact. There are two that have deceased beneficiaries. Those companies want to put money into her "Estate" which we don't have...(no estate account and no tax id number as wasn't necessary because under 150k and is small estate) No real property just these small accounts amounting to around 50k. I can't give them what they want, ie. estate account and fed tax id as i understand to get that i would need "Letters Testamentary" which requires going to probate court....catch 22. What are ways around this catch to avoid drawn out probate for her funds. I need to distribute to people in will and didn't want to have to tie it up. No contest on the will, no problems except these two annuities. What can I do to get her money freed up to distribute? Is there any way to do so with full blown probate and how to do this>
Submitted: 2 months ago.Category: Tax
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Answered in 4 minutes by:
12/20/2017
Tax Professional: Lane, JD, CFP, MBA, CRPS replied 2 months ago
Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 13,476
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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The estate that's being talked about here is the taxable estate, not a probate estate.

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You'll need to file an income tax return of an estate (form 1041) to report ANY income received after the date of death.

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There's no reason to open up probate here.

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Customer reply replied 2 months ago
I didn't want a tax professional, that is not what I asked.
Tax Professional: Lane, JD, CFP, MBA, CRPS replied 2 months ago

See this from IRS:

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"When someone dies, their assets become property of their taxable estate. Any income those assets generate is also part of the estate and may trigger the requirement to file an estate income tax return"

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Further,

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Tax Professional: Lane, JD, CFP, MBA, CRPS replied 2 months ago

I hold a law degree (J.D.), with concentration in Tax Law, Estate law & Corporate law, an MBA in finance, a BBA, and CFP & CRPS (Chartered Retirement Plans Specialist) designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate, non-profit, and tax advice to clients on three continents since 1986.

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I can help you with issues of tax, estate, probate, wills, trusts, etc. And these ISSUES DO intermingle. You have a tax issue here NOT a probate issue.

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When someone doesn't keep beneficiary designations up to date, the company pays to the TAXABLE estate (has nothing to do with probate)

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Tax Professional: Lane, JD, CFP, MBA, CRPS replied 2 months ago

More from IRS on this (from here: https://www.irs.gov/businesses/small-businesses-self-employed/deceased-taxpayers-filing-the-estate-income-tax-return-form-1041 )

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The decedent and their estate are separate taxable entities. Before filing Form 1041, you will need to obtain a tax ID number for the estate. An estate’s tax ID number is ***** an “employer identification number,” or EIN, and comes in the format 12-345678X. You can apply online for this number. You can also apply by FAX or mail; see How to Apply for an EIN.

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A decedent's estate figures its gross income in much the same manner as an individual.

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