Unique Estate Tax Issues in 2010

As we approach the end of the ninth month of the year, families of wealthy individuals who died early this year are now confronting some uniquely confusing issues.  Some of these issues include:

• In any other year, a form 706 must be completed within nine months after death. Since the estate tax has lapsed, this form isn’t required, but many families have to fill it out anyway in order to properly calculate state estate taxes.
• Nine months after death is also the deadline for disclaimers. Disclaimers can be used to let assets pass to other beneficiaries and take advantage of the lack of an estate tax. A disclaimer may or may not be advantageous, depending upon what Congress decides to do.
• Another headache for families of wealthy individuals dying in 2010, as I previously mentioned, is figuring out the cost basis of assets.

See For Heirs of Rich, Taxes Not Business as Usual, Private Wealth, Sept. 16, 2010.

Special thanks to Jim Hillhouse (WealthCounsel) for bringing this to my attention.