A great place to start is mom’s CPA or accountant. “Why?” you may ask? CPA’s can be incredible assets in establishing mom’s estate identity and titling assets correctly after death. Applying for an Employer Identification Number (EIN) from the IRS is a necessary first step and can be done by your CPA. An important part of applying for the EIN is determining the correct tax year end for the estate. There are numerous items to consider when determining this, for instance, what income is going to be received and when? Can we minimize the tax effect of the income to the estate’s beneficiaries by selecting a short year in year 1, so that having income falls in two reporting years (i.e. year 1 and year 2)? Is it best to only file one estate return, so that one return is the initial and final return?

Mom’s CPA may be able to provide information that assists in gathering data on current bank or money market accounts, pensions, equipment (if self-employed or a farmer) or even a copy of will or trust documents, if they were provided a copy. They may also have contact information for financial consultants that your mom used.

It is also important to establish bank accounts in the estate’s name and EIN. All estate dealings should be handled through this account. Additionally, all investments, CD’s, money market accounts, etc. should be established in the estate’s EIN. Not only is this good for record keeping, it will also assist both you and your CPA in correctly identifying income and expenses of the estate. Careful attention should be paid to income/expenses that were earned before death and income/expenses earned by the estate, or in some cases earned before death and received by the estate. Knowing these pieces of information will help determine which tax return the income/expenses will be reported on – mom’s final personal return or the estate return.

Mom’s CPA should be an integral part of the estate process. Why not start out on the right foot and head in the right direction? Schedule an appointment with mom’s CPA today.

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