Tax Returns for a Revocable Trust (and Trustee)?

Question

In February of this year I was named a trustee for a revocable trust established by my deceased grandfather for the benefit of my 57 year-old aunt who is not good at managing her money. The original trustees elected to effectively abdicate their positions after only nine months due to the money-management work involved. My question is twofold: 1) please confirm that I am responsible for filing tax returns for the trust and 2) please confirm that I am NOT responsible for filing tax returns for the period prior to becoming trustee (I would like to pass this back to the original trustees if possible). A tax returns for 2006 has not been filed yet.

Answer 1

1. Yes, assuming that you were either named as alternate in the trust documents OR were approved by the courts.

2. Sorry, but if #1 is correct, you are responsible for filing any and all returns. You aren't responsible for errors in previously filed returns but will have to correct them. And you are responsible for any unfiled returns. The trust is responsible for any taxes, penalties or interest though you could be held responsible personally if you don't file the returns or are otherwise negligent in your fiduciary duties.