Late Estate Tax Return Can Be Costly In Florida And Other States
June 14, 2014
Deadlines are important when administering an estate, as well as when it comes to filing an estate tax return. Failure to file an estate tax return on time can result in significant penalties in Florida or in any other state. This is what happened to one man’s estate after he died in early March 2003. His son failed to file the estate tax return on time due to a complication with the decedent’s wife’s citizenship status.
The decedent had left behind a wife who was not a citizen of the United States, which meant that she would not be able to receive a marital deduction when filing the estate tax return. The marital deduction for the estate tax is only available to spouses who are U.S. citizens. Therefore, the decedent’s son decided to tell his father’s wife to begin the process to become a citizen.
The estate tax return was due in nine months, which was in early December 2003. In order to obtain more time for his father’s wife’s citizenship process to complete, the decedent’s son filed for a six-month extension to file in order to avoid monetary penalties for filing the estate tax return late. The Internal Revenue Service granted the request for the six-month extension.
However, the executor decided to delay filing the estate tax return even after the six-month extension had passed since his father’s wife had still not obtained citizenship. After she did obtained citizenship, the executor filed the estate tax return as well as payment for the estimated amount owed, which included the marital deduction. Unfortunately, the decedent’s son made a mistake in not filing the estate tax return on time, which resulted in the estate being charged a late penalty.
This case illustrates how important it is to fully understand the rules regulating estate administration in Florida or any other state when making an estate plan. Failure to do so can be costly for intended heirs. In this particular case, the estate was fined over $169,000 for filing a late estate tax return.