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Obtaining Estate Tax return and Beneficiary Designation

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tracyking

Junior Member
What is the name of your state (only U.S. law)? Maryland

My mother's estate went through probate which is now closed. It took me a long time to finally figure out what may have likely happened. The will specified equal thirds to the three children, with the eldest as PR (personal representative).

Assets were a brokerage account, some annuities, and a few items of rather valuable jewelry that combined would be worth about the same as the smallest annuity. The PR never told the estate attorney nor the estate accountant (and thus, not the probate court) about the jewelry. It is likely that the other child, say Chris, demanded that the PR not proceed with PR's plan for PR to keep the jewelry, unless PR also arranged for Chris to get all of the smallest annuity.

The brokerage account and most of the other annuities had beneficiary designations: equal thirds. One of the annuities had no beneficiary designation, so was part of the probated portion of the estate. PR initially said the smallest annuity had the expected beneficiary designation: equal thirds. But lo and behold, PR later tells us the brokerage has suddenly discovered that the smallest annuity designated Chris as sole beneficiary. To me there are three possibilities re the smallest annuity...

1. just like PR said
2. equal thirds
3. no beneficiary designation

Circumstantial evidence, notably timing and lack of transparency, leads me to rule out #1. For example, the estate had to file estate taxes. Getting a copy of the return was like pulling teeth, but when I finally got it, all the annuities were disclosed to the taxman except the smallest annuity. You guessed it, the PR left off not just the jewelry but that annuity too! When I told PR the annuity should have been disclosed, PR went nuts, but the estate attorney told PR they'd have to submit an amended return.

PR has refused to let me see the amended return.
PR initially agreed to show me all the beneficiary designations, but kept making weird excuses.
The brokerage said they could only fax me the beneficiary designations where I am named.
The annuity company says, "We would need a court order to release the information."

Within the tax return, in the appendix, would be a sheet (annuity statement, near date of death) for each asset. Mostly I thought PR kept the smallest annuity out of the initial return in order to cheat a little on taxes, but the motive actually may have been to keep me from ever seeing that annuity statement.

How does one go about investigating this? I think PR may have forged my signature or something. Is there a way for me to verify the legitimacy of the beneficiary designation WITHOUT a court order? Thank you!
 


justalayman

Senior Member
When there are beneficiary designations, the account holder (the brokerage firm, bank, other financial insitution), they deal directly with the beneficiary. The accounts with beneficiary designations are not part of the probate estate although they will be part of the tax filings for the estate.

If you are listed as beneficiary on any financial account, the financial institution would be able to discuss the acccount with you, at least regarding your share. They would also pay you directly as the funds are not a probate asset and as such, the PR has no authority regarding your share.

So, contact the financial institutions. Ask if you were listed as a beneficiary. If you were, ask them to distribute your money to you. If you weren't a named beneficiary, then they will simply tell you they have nothing for
You. At that point, there should be something in the court file showing a distribution of money to the estate from the financial institution.
 

Dandy Don

Senior Member
Probate closed in what year?

What exactly are you trying to get more information about: the jewelry or the annuity?

What is the value of the jewelry? What happened to the jewelry? Is the jewelry mentioned in the amended return?

Find an attorney who can file the court order with the annuity company to get the information you have asked for. Why would you NOT want to get the court order?
 

tracyking

Junior Member
layman, the financial institution says "We would need a court order to release the information" which is consistent with both 1 and 3 of the three possibilities re the smallest annuity...

1. Chris is sole beneficiary just like PR said
2. equal thirds
3. no beneficiary designation

Don, probate closed in 2016. I'm trying to find proof that possibility 1 above is either true or false. I know where the jewelry is because Chris emailed PR (Chris itemized it and asked for it), and PR emailed back saying PR will be keeping all of it. I was CC'd on the emails. Jewelry value is ~50k.

I'm also trying to obtain a copy of the amended return. Neither the jewelry nor the annuity appeared on the initial return. So I probably need two court orders: one to the state comptroller/tax office to get the return, and one to the financial institution. I want to get court orders if that's the path forward, and would like to know how complicated that is re cost, time, my travel, likelihood of success, etc.

Thanks, I really appreciate the input!
 

Dandy Don

Senior Member
You need to be asking your questions to different local attorneys in your area until you find one that you feel can best serve you.

Does the will designate that the jewelry goes to one specific beneficiary or does it give an instruction that the jewelry must be sold?
 

tracyking

Junior Member
The will makes no specific mention of the jewelry. The next paragraph isn't really important but FWIW.

If I were the PR or if a reasonable person were the PR...
The verbal wishes of the deceased would certainly be taken into account. They usually want the jewelry to stay in the family, especially if that is how they themselves got it. But PR still has legal duties, so the solution is to take the sum of the jewelry appraisals into account as thirds (of the probated estate*) are calculated. There was no need to even get new appraisals, my mother had already done that and showed all of us where the appraisals were. Additionally, estate taxes are owed on jewelry just the same as they are owed on the accounts that the PR actually did disclose to the state.

* the will does NOT govern the non-probated estate (the accounts that had beneficiary designations)
** the taxman absolutely does care about both the probated estate and the non-probated estate
*** these points aren't really relevant to my questions
 
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Zigner

Senior Member, Non-Attorney
If I were the PR or if a reasonable person were the PR...
The verbal wishes of the deceased would certainly be taken into account.
That is actually an UNreasonable thing to say. The PR, by law, must follow the will. If the PR were to start doing things contrary to the will, then the PR would subject him/herself to liability.
 

tracyking

Junior Member
Zigner, I believe we're saying the same thing.

The fact that jewelry is not specifically mentioned in the will doesn't mean PR can take it. It means it's included amongst "My residuary Estate...includes but is not limited to all that property, real, personal or mixed, of whatsoever kind and description, or howsoever acquired, or wheresoever situate, which I may own or have the right to dispose of at the time of my death...I hereby give, devise and bequeath all of my residuary Estate to my beloved children, in equal shares, share and share alike, per stirpes and not per capita."

I only said it the way I did to point out that none of me or my siblings saw it as necessary to sell the jewelry. Just that the heir who wound up with the jewelry, by law and by will, shoulda wound up with proportionately less cash. PR chose to just keep it, and more to the point of this thread, may have pulled crazier shenanigans with the one annuity to keep Chris from objecting. PR actually used the word mollify when I asked PR "why do you suppose mother named Chris sole beneficiary?" Considering the news re sole beneficiary was BRAND NEW NEWS to all three of us, mollify makes no sense except perhaps PR was remembering how PR had to mollify Chris. Mother never told Chris anything about sole beneficiary. Annually, mother told all of us equal thirds.
 

latigo

Senior Member
Zigner, I believe we're saying the same thing.
Not so! You and Z are NOT saying the same thing! You alone have said that a PR has the authority to honor the "verbal wishes of the deceased" and that is unalloyed baloney!

There is a universal principal of probate law that applies in the construction of wills that is known as the "the four-corners rule." . Meaning that in the process of determining "testamentary intent" the court cannot go outside the language contained within the will.

There is one principle exception to the rule that permits the introduction of extrinsic evidence (not applicable here). And that is where the language of the will presents a latent ambiguity as to the testator's intent that can only be clarified by the introduction of parol (oral) and extrinsic evidence.

Example: "I hereby give and bequeath to my brother Oscar my vintage Chevy pickup truck." It develops that the deceased had several brothers, but none with the given name Oscar. He also did not own a vintage Chevy pickup or a Chevy of any model or year.

Taken at face there appears to be no ambiguity in these expressions. However evidence revealed that the deceased had a brother he always teasingly called Oscar because the brother didn't like being called Oscar. Plus the only vintage vehicle the deceased owned at time of death was a l932 Model A Ford pickup truck, which the deceased had restored with the help of "Oscar".

In this hypothetical parol(oral) or extrinsic evidence (beyond the four-corners) would be admissible to help identify the subject of the bequest and the intended recipient.

However, what your statement erroneously implies is that in this hypothetical IF the testator's will was silent as to the disposition of his l932 Model A Ford pickup truck, the PR could with impunity turn it over to whomever he chose justifying such distribution because of some inadmissible and likely trumped up "verbal wishes" on the part of the deceased.

If you want to deny have said so, that is fine with me. But it is here in black and white.
 

tracyking

Junior Member
Thanks, I appreciate the correction.

All I'm saying is there are three heirs. Let's say there's 250k cash and 50k jewelry in the probated portion of the estate. If PR added that up to 300k and in addition PR wanted the 50k in jewelry, then the distribution is...

PR: jewelry + 50k
me: 100k
Chris: 100k

It kills two birds with one stone, by not having to take a Dremel tool to the jewels. I'ma go with "reasonable" and most likely legal if PR did that (PR didn't). My questions have little to do with this part of things though. I'm suspecting a bigger fraud, and I'm trying to get a feel for how complicated it would be to get my hands on the amended Estate Tax return and the smallest annuity's Beneficiary Designation. Thanks, I really appreciate all your opinions!
 
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Dandy Don

Senior Member
It's doubtful that any Maryland attorneys would be reading this message board, so that is why you need to be consulting with someone in your local area.

Verbal wishes don't mean anything in probate court--the will is going to be administered according to what is in writing and what state law says.

Getting a court order for an estate tax return or a beneficiary designation form is done very rarely, so the cost should add up to no more than a few hundred dollars.

You can contact the Maryland Estate Tax Unit at 1-800-638-2937 to get information to see if your situation would allow someone else besides the PR or executor to get a copy of the return.
 

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