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<< My father-in law passed away in 1999, leaving a very small estate for which no probate is required under state law. The beneficiaries are my husband and his brother. We filed (what we thought was) a final tax return for my FIL in 1999.

Last night, we received a check made payable to my FIL in connection with the de-mutualization of his life insurance company. In addition, the letter stated that an additional 31% had been withheld as Y2000 taxes. >>

My condolences on your loss.

The IRS is rumored to be really nasty (I never believed it for a minute), but even they don't expect dead people to pull themselves together sufficiently to file income tax returns. I'm going to assume that it was just some quirky timing that caused an insurance company to issue a demutualization payment to a deceased insured. That, or their recordkeeping really needs some help.

If indeed the payment was proper, the company needs to issue it to the party entitled to it. I can't say who that is, but I know it isn't your deceased father-in-law. You need to talk to the insurance company.

Phil Marti
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