You are not alone. It appears that Congress and the IRS are also confused about the tax.
If you have more than a million dollars of assets, retirement, and life insurance, then you have probably been following the story of the federal estate tax and have been wondering how you will ever finish your estate planning.
Well, if you're hoping that the tax lawyers and the IRS know what's happening I have good news and bad news about estate planning and the federal estate tax.
First, the bad news. Even the IRS seems baffled about what to do. Take a look at this blurb and quote from the Wall Street Journal blog on comments of an IRS lawyer:
At the IRS Tax Forum in New York on August 12th, Patrick Leahy, an attorney with the estate and gift tax division in Manhattan, told an audience of tax prepares not to file a Form 706 for 2010 estates, or the estate tax return. According to Web CPA, Leahy said, “If you file a 706 to the IRS Service Center, we will rapidly return it to you because we don’t have a place to put them.”
Next the good news. There are flexible planning techniques that can be used to make your estate planning and estate tax planning work this year, next year, and for the foreseeable future. Find the right estate planning lawyer to help you to select the right choice for you. However, setting up a disclaimer will or trust will allow the surviving spouse to set up a trust or not, based on the law and economic realities at the time. These plans are much more flexible than the traditional A?B trust plans which may no longer work well.
David M. Frees III, Esquire
Phoenixville, Malvern and West Chester law offices
For more articles on Pennsylvania estate planning, probate, trusts, and related topics visit www.utbf.com/trusts-estates