Q: Must a simple trust be closed within 2 years of the grantor's death? I saw a question about this on the IRS form 1041.
My late parents made me trustee and requested (in writing) that my siblings and I hold onto their farmland for 5 years before selling. But I saw a question on the IRS 1041 this year asking whether the trust has been in existence for 2 years or longer (and to justify why). Is there a federal or Michigan law requiring the trust be closed within 2 years?
A:
No, a simple trust does not have to be closed within 2 years of the grantor's death. But it appears you may have misread the question on IRS Form 1041. On 2022 IRS Form 1041 page 3, at question 8, it asks "If the decedent’s estate has been open for more than 2 years, attach an explanation for the delay in closing the estate, and check here"
Note that this question asks about a decedent estate, and not a trust. A decedent estate is a separate legal entity and separate issue from a trust. This is really a tax question, and this is something you should not be trying to do for yourself. I recommend that you hire a tax attorney or CPA to assist you with properly completing trust and estate income tax returns.
Kenneth V Zichi agrees with this answer
A:
I absolutely agree with Mr Harris.
And NEITHER complex estate settlement (as the mere existence of a Trust implies) nor tax issues are fertile "DIY" ground.
If there is a car and nothing else or some SIMPLE probate, maybe, but even then, failing to publish appropriately can extend a statute of limitations that proper probate filings and publications can resolve and make your life easier. Don't try to save a penny and cost yourself YEARS of problems. Get licensed professional help!
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