Technology-Probate provides information on current technology and microcomputer software of interest in the probate and estate planning areas. The editors of Probate & Property welcome information and suggestions from readers.
Computerized Tax Forms
Ever since law firms started using computers for word processing, pre-printed forms have been a problem. Federal estate tax, state inheritance tax and federal and state fiduciary income tax returns must all be filed using government approved forms. Many states also require preprinted forms for petitions for probate, pleadings that accompany fiduciary accounts, articles of incorporation, LLC registrations, limited partnership certificates and other filings that can be necessary to estate administration or estate planning. Without a typewriter, these forms can be difficult or impossible to fill in neatly and easily.
The "highest-tech" solution for estate, trust and other fiduciary-related tax forms is to purchase the Form 706, Form 1041, Form 709 or other tax return software from the same vendors who supply fiduciary accounting software. (For a list of vendors and contact information for fiduciary accounting software, see the columns "New Versions of Old Friends," July/Aug. 1999; and "New Versions of Old Friends II," Nov./Dec. 1999.) Each vendor's tax programs should work with its fiduciary accounting program so that most information can be entered only once and schedules and totals calculated automatically, or with relatively minor adjustments.
Tax Forms on CD-ROM
For firms that do not use fiduciary accounting software, or for estates or situations in which other forms are needed, there are a number of software systems on CD-ROM that allow federal and state tax forms to be filled in and printed on a laser printer with plain white paper. Such systems are available from Kleinrock Publishing, Inc., (800) 678-2315; STF Services, (800) 541-7197, www.stfservices.com; and Tax Analysts, Inc. (800) 955-2444; www.tax.org. More sophisticated tax forms and tax advice and compliance systems are available from CCH ( www.cch.com) and Research Institute of America ( www.riahome.com).
The IRS also publishes a CD-ROM with federal tax forms and related publications (Publication 1796, U.S. Government Printing Office, (202) 512-1800, bookstore.gpo. gov), but not all of the forms include fill-in capabilities. Many are just documents in PDF or other formats that can be printed, but not filled in. (See the discussion of PDF format below.)
In the past, the simpler CD-ROM products have basically worked as "glass typewriters," allowing the user to fill in the form and save and print out the completed form, but not providing much in the way of logic or calculations. For example, the user could go to the space for gross income and type in "Spain" and the program would not care. Newer versions of these CD-ROMs provide better error checking, formatting and arithmetic.
For example, the program may warn the user if he or she is about to print a form that is missing critical information or includes information of the wrong type (words instead of numbers or vice versa). The program should also be able to insert commas (for thousands) automatically, round numbers to the nearest whole dollar and either display or suppress fractions of a dollar.
Most important, these programs will now perform many of the simpler calculations included in a tax return, such as adding columns of numbers on a schedule and adding or subtracting numbers within a form. Thus, the program might not be able to calculate the state death credit for the user, but it may be able to add up the numbers on each schedule and carry those totals forward to the recapitulation so that the gross estate will be calculated automatically.
Forms in PDF
PDF stands for "portable document format," developed by Adobe Systems Inc. for the popular Acrobat software system for creating and viewing formatted documents. The Acrobat system is useful because (1) the documents can be viewed with all of the fonts, formatting, graphics and other layout features intended by the author; and (2) the document "reader" is free and can be downloaded by anyone from the Adobe Web pages ( www.adobe.com). (Adobe makes money by selling the software that creates the PDF files.) Government agencies commonly use the PDF format to distribute tax and other kinds of forms. If the user goes to the IRS Web pages and downloads tax forms, he or she can download the forms in PDF format. Or, if one goes to the Web pages of a state government and downloads tax, corporation, LLC, probate or other forms, they probably will be in PDF format.
A tip for finding state forms: The home pages of most state governments can be found at www.state. xx.us, where "xx" is the postal code for the state. For example, the Pennsylvania home page is at www.state.pa.us. From the home page, finding the right bureau or agency to determine what forms can be downloaded is mainly a matter of working through the menus or any search features.
The problem with PDF is that most downloaded forms usually will not have any fill-in capability, and the Adobe Acrobat reader does not include any way to edit or fill in the downloaded forms. The Acrobat Exchange program, but not the reader, can create "fillable" PDFs, but most states have not prepared their forms that way. Faced with a PDF file that is not "fillable," a user will most likely have to use the scanning software or forms software described below to fill out the form.
One solution is to "print" the form to the scanning software or automated forms software described below, so that the form becomes a graphic image that the user can run through the "form typer" or "form recognition" features and fill in (or automate) in the same way one would fill in a form that had been scanned.
For firms that do not want to buy a fiduciary tax system or CD-ROM system, or for the occasional odd form that is not on a CD, another solution is to take a printed copy of the form (either printed by the government or downloaded in PDF format), scan it and then use the scanner software to fill in the form. If the scanning software includes a printer driver that will take another program's output and convert it to a graphics image, it should be possible to "print" a PDF file directly from the Acrobat reader to the scanning software, without first printing to paper.
The more sophisticated scanning programs include a number of useful features, and one of the most impressive is the ability to fill in scanned forms. For example, with the Paperport or Pagis Pro programs (both available from Scansoft, Inc., www.scansoft.com), a user can scan a form, then click on the form and drag it to the "form typer" or "form filler" icon. The software will automatically create "blanks" wherever there is a horizontal line on the page, and the user will then be able to tab from field to field and type in the data needed for the form, save the filled-in form and print it. One can even go back and change the data on the form and reprint the revised form.
There are two drawbacks to this approach. One is that the clarity of the form may suffer from the scanning process (although this is less of a problem if you can "print" a PDF file directly to the scanning software). The other is that the process produces large graphics files and slows printing because of the time required to print large graphic images.
A more elegant but time-consuming solution is provided by products such as OmniForm (from Scansoft, Inc., www.scansoft.com) and HotDocs Pro (from Capsoft Development, part of Lexis Publishing, www.capsoft.com), which allow firms to create their own automated forms, just like the CD-ROMs described above.
OmniForm can take a scanned form and apply a recognition process to the form that not only recognizes the words, numbers and horizontal and vertical lines on the form, but also recognizes where information must be filled in. OmniForm converts the form from a graphic image to an electronic format that can be edited to provide user prompts and formatting for each data field, data validation, automatic calculations and links to a database for saving and retrieving information.
HotDocs Pro offers similar capabilities but retains the graphic image of the form and prints information on the form as an electronic "overlay." Because HotDocs can also generate documents in word processing formats, the program can be used to create forms that share data with other HotDocs templates. So the system could be used to fill in a tax form and then to prepare the cover letter for the form, using the same information.
Several available products offer tax forms ready to be filled in and there are a number of products that law firms can use to fill in forms that commercial vendors have not automated. Which product or method to use depends on how frequently the form will be needed by the firm and the level of hardware, software and human resources available to the firm.
Technology-Probate Editor: Daniel B. Evans, P.O. Box 27370, Philadelphia, PA 19118; http://evans-legal.com/dan; e-mail: firstname.lastname@example.org.
Probate & Property Magazine is published six times annually and is included in section members' annual dues.