The Truth About Death and Taxes Revealed

Is April 2021 any different than before? Do you still ask, “What Is The Truth About Death And

Taxes?” My oldest son who was born on April 15th discovered as a small child what people

thought about “Tax Day.” If you spend any time with small children, you know already that

their date of birth is always a popular topic. By the time, my son was age 3 or 4 he was well

aware about “Tax Day.” Every time he told someone that his Birthday was April 15th they

always responded with “Oh, Tax Day!” Fortunately for my son, he does not have to share his

birthday with “Tax Day” this year since the federal income tax filing due date for individuals for

the 2020 tax year will be automatically extended from April 15, 2021 to May 17, 2021. “Happy

18th Birthday Connor!”

The truth about taxes is that you must file every year as an individual. This requirement is not

excused upon your death. How does a deceased person file a tax return? It is up to your estate

representative: The Administrator under the Probate or the Executor under the Will or the

Trustee under the Trust to file the deceased person’s final tax return if the decedent received

taxable income through the date of their death. Currently, in California no estate taxes are due.

Currently a federal tax filing is required for estates with combined gross assets and prior taxable

gifts exceeding $11,700,000 in 2021.

For some, it is difficult to talk about death but the truth about death is that it is inevitable. We

do not know how many days we have here on earth so all we can do is to make the best of it and

live each day to its fullest. This was true before every area of life has been disrupted by the

global spread of the coronavirus. Now that I have upgraded from a 2014 vehicle to a 2017

vehicle, I have discovered that one of my favorite upgrades is the fact that my dashboard counts

down and reports to me how many miles I can drive until I run out of gas. Unfortunately, our

smart watches and smart phones will never be able to predict the day and time of our

unavoidable death. The truth about death is that we must plan as if it is going to happen sooner

than later but we can always update our estate planning documents as circumstances and

objectives change. The county recorder has already issued your birth certificate in your name, at

death the county recorder will issue your death certificate. Your estate representative will be

tasked with gathering your assets, paying your creditors, and making a distribution to your legal

heirs or to your named beneficiaries.

Now that you know the truth about death and taxes, you can make the process easier for your

loved ones by obtaining an estate plan. You can also take the extra steps: writing letters to your

loved ones; listing specific gifts; writing your own obituary; preplanning your funeral

arrangements; collecting all information pertaining to non-trust assets including insurance and

retirement accounts.