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Question About Estate Account

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xonxoff

Member
Ohio - Hoping someone can help. IRS hold times are incredible and the one bank I called did not seem to understand. My sister was the executor of my dad's estate. She had opened an estate account and acquired an EIN number. She passed away in April of cancer and my brother-in-law was named as substitute executor. Dad's house was under contract. The house is now sold and BIL has a check but the bank says even with the letter from court naming him as executor - he needs a new EIN and new estate account. Does anyone know 1. Is this correct? and 2. Is the IRS really backed up because of COVID and spending their on-hand resources answering stimulus check questions? The new EIN was requested 3.5 weeks ago thru an online "service" (I know it's free to do it yourself) and we have no new EIN. Thanks in advance.
 
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adjusterjack

Senior Member
Condolences.

my brother-in-law was named as substitute executor.
Named by the court, I hope. For which estate? Your Dad's or your sister's? Both?

The house is now sold and BIL has a check
Who is the check made out to? There are two estates going on. One is your Dad's and one is your sister's.

Your BIL will need an estate account and EIN for your sister's estate.

The check from the sale of your Dad's house should be going into your Dad's estate account and the proceeds distributed to his heirs after all his debts are paid.

Then, whatever part of his estate went to your sister would be distributed in accordance with her will.
 

xonxoff

Member
Condolences.



Named by the court, I hope. For which estate? Your Dad's or your sister's? Both?



Who is the check made out to? There are two estates going on. One is your Dad's and one is your sister's.

Your BIL will need an estate account and EIN for your sister's estate.

The check from the sale of your Dad's house should be going into your Dad's estate account and the proceeds distributed to his heirs after all his debts are paid.

Then, whatever part of his estate went to your sister would be distributed in accordance with her will.
Thank you. My brother-in-law was named substitute executor for my dad's estate since my other sister and I live out of state. The check is made out to my dad's estate. The bank said that the estate account that was set up by my sister for my dad's estate was no longer good because nobody could access it besides my sister and that my brother in law needed to open a new estate account for my father and obtain a new EIN number. This did not sound right to me - what if the check would have been deposited already and then my sister died? Does the IRS need to update their records on who the executor of my dad's estate now is and do they really need to issue a new EIN number?
 

adjusterjack

Senior Member
My brother-in-law was named substitute executor for my dad's estate
Again, I ask, by the court? Does he have court papers appointing him executor of your Dad's estate?

I think the bank person is wrong but I guess you aren't going to get very far arguing with a bureaucrat.

Your BIL can go online to the IRS and get a new EIN in a few minutes.

https://www.irs.gov/businesses/small-businesses-self-employed/deceased-taxpayers-filing-the-estate-income-tax-return-form-1041

Once he does that I suggest he do the estate banking business elsewhere for the new estate account.
 

xonxoff

Member
Again, I ask, by the court? Does he have court papers appointing him executor of your Dad's estate?

I think the bank person is wrong but I guess you aren't going to get very far arguing with a bureaucrat.

Your BIL can go online to the IRS and get a new EIN in a few minutes.

https://www.irs.gov/businesses/small-businesses-self-employed/deceased-taxpayers-filing-the-estate-income-tax-return-form-1041

Once he does that I suggest he do the estate banking business elsewhere for the new estate account.
Sorry, yes. After sis died we agreed BIL would be the substitute executor and submitted the request to the court and approved it. We have both tried online. We get a message saying cannot complete the request and need to call IRS. Tomorrow, I will call a local bank and see what they think. Also try to call IRS. BIL not patient being placed on hold for any extended amount of time.
 

Taxing Matters

Overtaxed Member
The house is now sold and BIL has a check but the bank says even with the letter from court naming him as executor - he needs a new EIN and new estate account. Does anyone know 1. Is this correct?
No, the bank is not correct. He needs to use the EIN the estate already has. If his current bank won't accept the check for the estate even after your BIL talks with the bank manager or, better still, someone higher in the bank — someone who will actually talk with the bank's legal department —and presents the bank with the letters testamentary that the court gave him naming him executor then he should open an account at another bank that understands things better. There are plenty of banks that would be willing to take the estate's business and that check, I'm sure.

Is the IRS really backed up because of COVID and spending their on-hand resources answering stimulus check questions?
Yes. I've had a difficult time doing a number of things with the IRS for clients because of the covid-19 mode the agency is operating under.
 

xonxoff

Member
I was able to get through to the IRS. They stated that they believe the bank is not needing a new EIN but needing letter from the IRS stating that the executor has been changed and EIN is still valid ( IRS may or may not decide to issue a new EIN). They stated yes they are backed up and it sounded like they are not even touching incoming mail but only fax requests and the fax machine was "turned off" until June. They advised that BIL call them first thing in the morning and see if IRS can determine if the 3rd party request is in process. If not, or if it can't be determined, they stated he can submit a new SS-4 himself via fax.
 

xonxoff

Member
Also, I was wondering if someone could tell me how a claim against an estate is paid? My dad only had one claim - a department store credit card with like a $300 balance. The store submitted the claim against the estate. Does the executor just call the usual payment number and pay it? How would the court know it's been paid when time comes to close the estate?
 

Zigner

Senior Member, Non-Attorney
Also, I was wondering if someone could tell me how a claim against an estate is paid? My dad only had one claim - a department store credit card with like a $300 balance. The store submitted the claim against the estate. Does the executor just call the usual payment number and pay it? How would the court know it's been paid when time comes to close the estate?
A canceled check from the estate account along with a statement showing the payment and a zero balance would be great proof. It could also be done online, but a canceled check provides solid traceability (if needed).
 

LdiJ

Senior Member
Thank you. My brother-in-law was named substitute executor for my dad's estate since my other sister and I live out of state. The check is made out to my dad's estate. The bank said that the estate account that was set up by my sister for my dad's estate was no longer good because nobody could access it besides my sister and that my brother in law needed to open a new estate account for my father and obtain a new EIN number. This did not sound right to me - what if the check would have been deposited already and then my sister died? Does the IRS need to update their records on who the executor of my dad's estate now is and do they really need to issue a new EIN number?
Go set up a new account using the regular EIN number for the estate at another bank. Whoever your brother in law is dealing with at the current bank is confused and doesn't understand how things work. The account and the EIN number belong to the estate, not to your deceased sister.

The bank does NOT need any paperwork from the IRS showing that there is a new executor. The court is the one who provides that paperwork and the court has already done so.
 

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