Trusts and Estates Business Guide
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We documented 5 challenges in Trusts and Estates. Now get the actionable solutions — vendor recommendations, process fixes, and cost-saving strategies that actually work.
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All 5 Documented Cases
Excise taxes on missed or incorrect IRA RMDs for decedents’ estates and beneficiaries
25% excise tax on each missed RMD amount per year (e.g., $2,500 penalty on a $10,000 missed RMD; multi‑year failures can easily reach tens of thousands of dollars across accounts and beneficiaries)In the trusts and estates context, executors, trustees, and beneficiaries who fail to take a decedent’s or inherited IRA required minimum distributions (RMDs) on time incur an IRS excise tax of **25% of the undistributed RMD**, potentially reducible to 10% if corrected within the IRS “correction window.” The penalty applies per year and per missed amount, so multi‑year or multi‑account failures in an estate cause recurring, compounding losses until corrected.
Prolonged Estate Distribution Due to Probate Filing Delays
$10,000-$50,000 per estate in holding costs and lost investment incomeProbate processes enforce mandatory waiting periods, such as 6 months minimum before estate closure and 4 months for creditor claims, delaying asset distribution to beneficiaries. Dependent administrations require court approval for every major action, extending timelines beyond 9-12 months in many cases. Missed deadlines for tax payments or hearings further drag out final distribution.
Excessive Legal and Administrative Fees from Repeated Probate Filings
$2,000-$15,000 per estate in cumulative filing and professional feesFailing to maintain accurate financial records or notify interested parties results in court rejections, necessitating multiple filings and attorney interventions. Incorrect asset valuations trigger legal challenges and additional accounting preparations. Strict reporting requirements, even for initially exempt estates, lead to unexpected court-mandated accountings and hearings.
Court Rejection and Delays from Incomplete or Incorrect Probate Filings
$5,000-$20,000 per estate in added attorney and court feesIncomplete or incorrect documents submitted to probate court are rejected, causing significant process delays and requiring refiling with additional legal fees. Missing strict filing deadlines, such as the 6-month will filing requirement, prevents estate closure and prolongs administration. Inaccurate record-keeping and asset valuations lead to court scrutiny, disputes, and extra expenses during hearings.