Trust & Estate Tax Organizers

Executor and Trustee Responsibilities

Executors manage and settle a deceased person’s estate, while trustees oversee and administer assets placed in a trust. Both roles require performance of fiduciary duties to act in the best interests of beneficiaries.

Trustees

A trustee manages assets placed in a trust, often for the benefit of multiple beneficiaries, and may have long-term or ongoing obligations. Key responsibilities include:

  • Managing Trust Assets: Overseeing investments, real estate, or other property within the trust, acting in the beneficiaries’ best interests, and following the terms of the trust document.
  • Fiduciary Duty: Trustees are legally obligated to act prudently and loyally, avoid conflicts of interest, and protect trust assets 
  • Asset Distributions: Making distributions of income or principal to beneficiaries according to the trust document, which could include scheduled payments or conditional distributions.
  • Record-Keeping and Reporting: Maintaining detailed records of all transactions, preparing tax returns, and communicating regularly with beneficiaries.
  • Long-term Administration: Trustees may maintain the trust over several years or generations, monitoring current and future needs of beneficiaries 

Estate Executors

An executor (also called a personal representative in some states) is named in a will to manage a deceased person’s estate. Key responsibilities include:

  • Probate Process: Filing the will with the probate court, validating its legitimacy, and obtaining legal authority to act on behalf of the estate.
  • Asset Inventory and Management: Identifying, locating, and safeguarding all estate assets, including real estate, bank accounts, investments, and personal property.
  • Debt and Tax Payments: Settling outstanding debts and paying taxes owed by the estate, which may involve liquidating assets or using estate funds.
  • Asset Distribution: Distributing remaining assets to beneficiaries according to the will or applicable state law.
  • Legal and Administrative Duties: Maintaining accurate records, updating the probate court, notifying financial institutions, creditors, and government agencies, and handling estate-related legal responsibilities.
  • Filing tax returns for the decedent and the estate.

Tax laws and rulings governing administration of estates, particularly with respect to taxes, are complex. Therefore, an executor can be in charge for two or three years before the estate administration is completed. During the period of time the estate continues to exist, the executor is required to pay necessary expenses relating to administration of the estate from the estate’s assets. 

 Form 1041 U.S. Income Tax Return for Estates and Trusts

Both Trusts and Estates report income and pay tax to the IRS using Form 1041 U.S. Income Tax Return for Estates and Trusts to report:

  • The income, deductions, gains, losses, etc. of the estate or trust.
  • The income that is either accumulated or held for future distribution or distributed currently to the beneficiaries.
  • Any income tax liability of the estate or trust.
  • Employment taxes on wages paid to household employees.

Form 706 - United States Estate (and Generation-Skipping Transfer) Tax Return

Commonly referred to as the "Death Tax", Form 706 is to figure the estate tax imposed by chapter 11 of the Internal Revenue Code.  Oregon also imposes an estate tax which is figured using Form OR-706, Oregon Estate and Transfer Tax Return.

Depending on the size (value) of the Estate and the amount of income earned by the Estate, one or more of the following returns may need to be filed:

  • Final individual federal and state tax returns for the decedent (Form 1040, OR-40)
  • Federal and state Estate Tax Returns (Form 706, OR-706)
  • Fiduciary Income Tax Returns (Form 1041, OR-41)

The executor or administrator of an estate is responsible for performing the following duties relating to tax matters of the estate:

In addition, the executor/trustee/fiduciary should file Form 56, Notice Concerning Fiduciary Relationship, with the IRS. 

All income earned by the decedent prior to death is reported on the final Individual 1040 return. All income earned by the estate after the date of death is reported on the estate Fiduciary 1041 return.  

Form 1041 Fiduciary Income Tax Return Organizer for Estates and Trusts

All income earned by the decedent prior to death is reported on the final Individual 1040 return. All income earned by the estate after the date of death is reported on the estate Fiduciary 1041 return.

Fiduciary Responsibilities of the Trustee

The Trustee should file Form 56, Notice Concerning Fiduciary Relationship, with the IRS and apply for a Trust Employer Identification Number (EIN).

Our Fiduciary Organizer is provided to help you gather and organize information relating to preparation of your Form 1041 Fiduciary Income Tax Return. You should complete our Individual 1040 Return Organizer.

Print and complete a PDF copy of the Organizer
Complete a fillable Organizer online
Complete the organizer embedded at the bottom of this page.

When must Form 1041 be filed?

Trusts and Estates must file Form 1041 to report income as follows:

  • Trusts must generally file Form 1041 when annual income exceeds $100.
  • Estates with income over $600 are also required to file Form 1041.

Filing deadline and extensions

Trusts generally file calendar-year returns with a filing deadline of April 15. The deadline may be extended to October 1 by filing Form 7004.

Estates choose their tax year when filing their first return. The filing deadline for Estate 1041s is 3.5 months after the year-end chosen by the Estate.

A section 645 election may be made to include income of a revocable living trust owned by a decedent in the 1041 filed by an estate.

A 5.5-month extension of time to file may be made by filing Form 7004.

Form 706 Estate Tax Checklist (Organizer)

Form 706 is used to pay estate taxes. Oregon’s filing requirements apply to estates as small as $1 million.

  • The total value of estate assets was $1,000,000 or more and taxable by Oregon.
  • The decedent was a resident with a $1,000,000+ estate or a nonresident owning Oregon real property.
  • The estate made estimated tax payments and the gross estate was later under $1 million.

For certain large estates valued at $13 million or more, Federal Form 706 may also need to be filed.

If you are interested in having us prepare a Form 706 for you, please schedule a consultation.

Due Date for Filing Estate Tax Returns

  • IRS Form 706: 9 months after the date of death.
  • Oregon Form OR‑706: 12 months after the date of death.

Extension of Time to File and/or Pay Taxes Owed

IRS: You may request a 6-month extension by mailing Form 4768.

Oregon: You can request an extension by mailing Form OR‑706‑EXT.

Form 706 Checklist

Our Estate Tax Preparation Checklist will help you gather required documents.

You may wish to schedule an Intake Interview or Tax Consultation appointment with a staff member experienced in estate matters.

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Fiduciary Form 1041 Fillable Organizer

Gathering documents and preparing to deliver important information to your tax preparer
We recognize that preparation of a fiduciary tax return can be a daunting task. You may wish to schedule an Intake Interview or a Tax Consultation appointment with one of our staff members who is experienced in estate matters, prior to completing this tax organizer.

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Form 706 Estate Tax Preparation Checklist