Estate Tax Mayhem

The estate tax mess has created frustration and confusion among the wealthy, sending herds of people to attorneys with questions and the desire to amend documents. Although attorneys appreciate the business, they too are frustrated and even overwhelmed.

In addition to swarms of people worrying about the estate tax, many people are trying to take advantage of the grantor retained annuity trust (GRAT) before the federal government changes the terms of these trusts. Attorney Cheryl Hader said she set up 30 GRATs last month, five times the amount of GRATs she sets up in a normal month.

The only good thing about the return of the estate tax in 2011 is clarity. While potentially seven times as many people will have to pay estate taxes beginning in 2011, attorneys and taxpayers are ready to know exactly what the law is and how to comply with it.

See Paul Sullivan, Confusion Over the Dormant Estate Tax Keeps Advisers Busy, NY Times, June 11, 2010.

Special thanks to Joel Dobris (Professor of Law, UC Davis School of Law) for bringing this to my attention.