Thinking About the Impossible for 2010

Althoughmost would probably place the chances at less than 50% that the year2010 will bring a repeal of federal estate ax and its companioncarryover basis, it is far from impossible.  It seems prudent to planfor repeal of federal estate tax and carryover basis now by having adecedent’s estate planning documents structured to maximize flexibilityand savings.  In addition, married clients need to decide how muchshould pass into a nonmarital deduction trust and how much, if any,should pass to (or in a QTIP trust for) the surviving spouse.  Althoughfrom an overall perspective it seems appropriate to minimize what thesurvivor inherits if there is no estate tax, the carryover basisprovisions suggest a sizable disposition to the spouse (or, perhaps,better yet, to a QTIP trust) to take advantage of the $3 millionspousal increase in basis rule under Code § 1022.  Also,executors/personal representative should be specifically authorized tomake such allocations of basis increase as they think best.