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Jun 1, 2011 12:00 PM
A Cautionary Tale
Discuss, decide and document
Most executors know that there need not be estate tax for decedents dying in 2010. Therefore, many executors believe that the estate administration process is easy, as in, “No estate tax, no action.” Wrong and scary.
We recently had an estate of about $5.5 million, consisting of a few blue chip stocks that the decedent had owned for a long period of time (translation: low basis). The decedent lived in Illinois. The executor assumed the estate would pay no estate tax (of about $165,000). We tried to get the executor to understand that by electing not to pay estate tax, the estate would only get a step-up in basis of $1.3 million, that the stocks had an aggregate basis of about $1 million and that we really needed to do an analysis of whether to opt in or opt out of the estate tax regime. The executor refused our offer to perform an analysis and further indicated that the estate wouldn't pay for an analysis if we did one.
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Topics of Interest
| Estate Tax | Donor Advised Funds |
| GSTs | Family Offices |
| Private Foundations | Life Insurance |
| 2010 Tax Act News | Industry Trends Surveys |
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