Estate and Trust

1. Are estates and trusts required to issue Form 1099-Misc to executors, trustees, accountants and lawyers if they are not conducting a trade or business but only conducting estate and trust services?

Yes. The instructions for Form 1041 read:

You may have to file these information returns (Forms 1099-A, B, INT, LTC, MISC, OID, R, S, and SA) to report acquisitions or abandonments of secured property; proceeds from broker and barter exchange transactions; interest payments; payments of long-term care and accelerated death benefits; miscellaneous income payments; original issue discount; distributions from pensions, annuities, retirement or profit-sharing plans, IRAs (including SEPs, SIMPLEs, Roth IRAs, Roth Conversions, and IRA recharacterizations), Coverdell ESAs, insurance contracts, etc.; proceeds from real estate transactions; and distributions from an HSA, Archer MSA, or Medicare Advantage MSA.

2. Qualifying payments made to an estate have to be reported on a 1099-M. The W-9 form only requests identification of sole proprietor, partnership and LLC filing status. How do we know if the payee is an "estate"?

There is a check box for “Other.” You could also ask them.

3. If an individual dies and their estate pays legal and professional fees, executor fees, etc., but is not in a business, is this estate required to file Form 1099-Misc for these services? See answer to Q/A-1 above. And a second question: if the estate was small enough to not be required to file a 1041 or 706 and therefore did not get a separate tax ID number, whose ID number should be used to report the legal fees (possibly the executor who paid the fees)?

You must get an EIN for the estate.