Posted on 08/20/2014 12:55:18 PM PDT by Cementjungle
RANT!
It's a frustrating situation to have in your hands a check from the US Treasury for over $141,000 and you can't do a darned thing with it except frame it and hang it on the wall as a souvenir.
My MIL passed away in 2011, and my wife (as the only surviving relative) was named in the will as the executor of the estate and successor to the trust. The will was filed with the courts in L.A. and the long process began.
We paid the IRS $240K the first year in estimated estate taxes along with a request for an extension. The next year we filed the 706 and were refunded $68K. My wife transferred her mom's properties into her name and sold them, dealt with bank accounts, IRA and other investments.
Last year we get a notice from the IRS that the estate filing had been chosen for an audit... so we did all the work involved in that. The IRS attorney wound up REDUCING the estate and then finally (recently) issued her a check for over $141K. Great... except the check is useless.
The check is made out to my wife (on line one) and on line 2 it says (Estate of..... her mom's name). Our banks (Chase and B of A) will not touch the check because there's no account with the name of "Estate of XXXXXX". We showed them the will naming her as executor, the trust agreement, the IRS estate filing, the subsequent tax filings for her mom's trust, the correspondence with the IRS that led to the refund.
No go... since this was a trust there was no probate court... but the banks insist on a letter from a probate court. We can't probate the estate because the estate has already been properly settled.
We called the IRS attorney... he was very nice, but said there's nothing they can do.... and this happens a lot. He says you just have to keep trying different banks until you can find one that will take the check.
Anyone here have any experience with this sort of thing?
Did you try a tax/estate lawyer?
Even if your Mom avoided probate, the executor can sometimes open an estate account, I believe. After all, the check is addressed to the estate; it’s part of the estate; and the executor is empowered to take actions to distribute the proceeds of the estate.
Also, the estate has not been properly settled.. a new asset was found.
Some of the better banks even have trust departments who can guide you here. Don't give up.
/johnny
Two good points for sure….also, as a last resort, there are services that cash checks for a percentage and handle structured settlements.
Clearly the IRS is not going to refuse the check - it will sail through. You’ll get your money at some point…...
Yeah, I think you just have to find a bank that will cash it. Check around, try small local banks, as they are usually more accommodating. Show them your paperwork, and see if you can open an account for the “Estate of XXX” and deposit the check there.
I’m guessing you will find some small bank more than happy to cash the check if you are depositing those funds with them.
The estate isn't settled, and wasn't, if there was a settlement from the IRS still in limbo.
/johnny
“Never give up. Never, never, never, never, never, never, never.” — Winston Churchill.
Send it to me….I’ll give you a thou…..(just endorse it first….)
yikes!
I’ll give the man about tree fiddy.
I have no experience.
Comments one and two sound goodb
The point is you need an attorney that represents you, not the IRS.
Just have your wife endorse the check and send it to me.
Just kidding...I’ve had a similar situation many years ago (and for a piddling amount of money) and had to “shop around” to get it properly paid. If you haven’t already done so, you should go back to your county office that handles probate (if that’s how it’s done in your state) and see if they can “reopen” the estates. Failing that, I’d recommend shopping for an attorney who would be willing to get it settled for a reasonable fee.
Good luck!
So you are saying there was no probate, before, because all assets were held in a trust, so there was no “estate” to which probate would pertain? But now there IS an estate, which is the IRS check. So you should be able to go to court and open the estate, get a court document showing your wife as the executor/administrator. Then you can go to a bank to open the account to use the check.
This isn’t unusual. Some legwork and an attorney can help set up the estate paperwork and bank account.
What would happen if you took the check to one of the Federal Banks and ask them to cash it for you(check issued by the Feds)?
Too bad your wife can’t just sign it twice, with “Executor” after her second signature (line 2).
We have since moved to FL, and were hoping to not spend the whole check on legal fees to go back to L.A. and open up a whole new estate process with the courts.
Oddly, Chase did accept for deposit the first $68K check in 2012 which was made out the same way. They tell us that either they did that by mistake, or their internal rules have changed.
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