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Here’s the scenario nobody wants but more and more people are living:
Your parent dies.
You’re planning the funeral, sorting through their things, trying to keep it together.
Then you start opening mail.
And you realize… they haven’t filed tax returns in years.
Now the IRS is in the middle of your grief. The estate is frozen. The kids are stressed, confused, and broke from fronting funeral costs. And the government doesn’t care that you’re “still processing.” They want their money.
That’s the reality we unpack in Day 5 of the 12 Days of Giving series on the No BS Wealth podcast, with tax pro Morgan Q. Anderson, EA.
This isn’t theory. This is happening in real families, right now.
The BS We’re Fed About “It’ll All Work Out”
Most older adults don’t say, “I’m going to leave my kids a tax nightmare.”
They say things like:
“I’ll get caught up on taxes later.”
“It won’t matter when I’m gone.”
“The kids will figure it out.”
“I don’t want to talk about money; it stresses me out.”
That’s the BS.
We treat taxes and estate planning like they’re optional, like paperwork someone else will magically handle after we’re gone. We act like ignoring it is the same as solving it.
But avoidance is a decision.
And it has consequences.
Big ones.
The No BS Reality: Unfiled Returns Freeze Everything
In the episode, Morgan walks us through a real case:
A mom with progressing dementia
Four years of unfiled tax returns
Over $50,000 in penalties and interest
A 21-month battle with the IRS and the state
An estate that could not move forward until it was all resolved
Let that sink in:
Almost two years where the family couldn’t close the estate, access funds, or move on.
Here’s what most people don’t understand:
If the tax returns aren’t filed, the estate doesn’t close.
Period.
It doesn’t matter how “simple” things seem.
It doesn’t matter if “there wasn’t that much money.”
It doesn’t matter if everyone “agreed” on who gets what.
Until the IRS is satisfied, the estate is stuck in limbo.
Meanwhile, real life is happening:
Kids are putting funeral costs on credit cards.
Siblings are arguing over who dropped the ball.
Grief is turning into resentment.
The “responsible one” in the family is burning out.
This is the cost of pretending taxes are optional.
Dementia, Pride, and the Money Secrets No One Sees
A big part of this mess is dementia and declining mental health.
People start:
Forgetting to file.
Avoiding mail because it makes them anxious.
Hiding their struggles out of embarrassment or pride.
From the outside, everything can look fine:
Bills are on auto-pay, lights are on, groceries are being bought.
Underneath?
Chaos.
And because talking about money is already taboo in most families, nobody checks in until it’s too late. No one asks, “Hey, are your tax returns up to date?”
By the time the kids see the full picture, that parent is either mentally gone… or physically gone.
Stop Making Your Kids the Cleanup Crew
One of the most important points Morgan makes in this episode:
Your kids should not automatically be your executor.
We love the idea of “keeping it in the family.”
But here’s what that often looks like in real life:
One kid gets saddled with all the responsibility.
The others sit on the sidelines and critique.
Every delay or surprise turns into, “What did you do wrong?”
If there are unfiled returns, missing paperwork, or messy finances, that “executor” role can turn into a part-time job for years.
A better move:
Use a neutral third-party (professional executor, trust company, attorney, or other fiduciary) to administer the estate.
Let your kids stay kids. Let them grieve, not manage a tax crime scene.
It’s not about cutting your family out.
It’s about protecting them from a role they’re not equipped for—and shouldn’t have to carry.
If You’re the Adult Child, Here’s Your Reality Check
If you’re reading this and thinking, “Yep, that’s going to be my problem,” you’re probably right.
You might be:
The one with the spreadsheet.
The only sibling your parents “trust” with money.
The one who lives closest or answers the phone the most.
Like it or not, you’re the one this lands on.
So here’s what you can start doing now:
1. Have the Conversation (After the Holidays)
Don’t blow up Thanksgiving.
But after the holidays, it’s time to get real.
Ask your parents:
“Are your tax returns filed and current?”
“Who does your taxes?”
“Where are your key documents—will, trust, insurance, passwords, account list?”
You don’t need every detail of every account.
You need to know:
Are we current?
Who do we call?
Where’s the paper trail?
2. Get Clear on the Estate Plan
Ask if there is:
A will
A trust
Beneficiary designations updated on retirement accounts and life insurance
Then ask the key question:
“Who is your executor or trustee—and why?”
If it’s you, be honest about whether you can actually handle it. Suggest bringing in a pro if the situation is complex or strained.
3. Bring in Pros Before It’s a Crisis
If you already suspect there are missing returns or messy finances, don’t wait for a death certificate to start fixing it.
This is exactly where:
A tax professional (like Morgan)
A financial planner/family office
An estate attorney
can tag-team and start cleaning things up while your parent is still alive.
That gives you options. And it gives your parent a say in how things get handled.
If You’re the Parent: Don’t Leave a Mess and Call It “Love”
If you’re the one with the assets, the accounts, the history, let’s be blunt:
You might not be afraid of your own death.
But your kids will be the ones living in the fallout of your decisions.
Filing your taxes, updating your estate plan, and choosing a neutral executor is not about the IRS.
It’s about:
Respecting your kids’ time and mental health
Protecting their relationships with each other
Making sure your money actually does what you want it to do
You don’t have to be perfect.
You do have to stop ignoring it.
Do This Next
Here’s your short list coming out of this:
If you’re a parent:
Get current on your tax filings. All of them.
Update your will/trust.
Strongly consider a third-party executor or trustee.
If you’re an adult child:
Schedule the “money and taxes” conversation after the holidays.
Confirm whether your parents are current on returns.
Start building a small team: tax pro, planner, estate attorney if needed.
For everyone:
Stop pretending this is something you can “figure out later.” Later is already on its way.
This blog is tied to Day 5 of our 12 Days of Giving series on the No BS Wealth Podcast with Morgan Q. Anderson, EA.
If you want to hear the full breakdown of the real-life case we talk about—and exactly how Morgan negotiated with the IRS and the state over 21 months—go listen here:
🎧 Listen on Spotify:
https://open.spotify.com/episode/3X9A3zg6sZUgs1Li3D2ul7?si=Z4Wy-J8bR8GAw7MLa5k2bw
🎧 Listen on Apple Podcasts:
https://podcasts.apple.com/us/podcast/12-days-of-giving-day-5-unfiled-tax-returns-dementia/id1598154326?i=1000741516991
Because the worst time to learn how this works… is after someone’s already gone.