What is a rights or things return and can it reduce tax owed by a deceased person's estate?

A rights or things return is an optional, separate tax return an estate can file for certain amounts the deceased had earned or become entitled to before death but hadn't yet been paid or reported — things like uncashed employment income, unpaid director's fees, or certain investment income that had accrued but wasn't yet due. Instead of reporting all of that on the deceased's regular terminal return, it can be reported on this separate return instead.

The benefit is that a rights-or-things return gets its own set of graduated tax brackets and personal credits, separate from the terminal return's. That means income that would otherwise stack on top of everything else the deceased earned in their final year, and get taxed at higher marginal rates as a result, can instead be spread into a second return taxed from the bottom bracket up, often reducing the estate's overall tax bill.

Not every deceased person will have amounts that qualify, and there are time limits and elections involved in choosing to file this way rather than including the amounts on the terminal return. An executor should raise this option with the estate's accountant early, since identifying what qualifies takes a careful look at the deceased's affairs around the date of death.