The Living Trust Advisor

CHAPTER 22 The IRS Is Back! And This Time, It’s for Real! Or, “Sorry about Your Parents’ Deaths. That Will Be $200,000, Please.”

It was a huge effort to write this chapter for the first edition of The Living Trust Advisor. The state of the estate tax was in massive flux. Whether your children (or other heirs) paid estate taxes after your death involved seemingly endless factors and scenarios—and I felt compelled to address nearly all of them. And on top of that, nobody knew anything about whether we would have an estate tax after 2011. The ultimate estate tax planning advice I could offer was to facetiously instruct you to die during the one-year-only 2010 estate tax repeal.

To put it mildly, reading another chapter about estate tax stuff is not an especially thrilling prospect—especially after you survived the Chapter 13 slog-fest dealing with estate tax issues after the first spouse dies. But you’ll hardly break a sweat reading this chapter about estate tax stuff that arises after the death of the surviving spouse. Why? Because you already did the hard estate tax work after your spouse’s death to ensure that no estate tax will be paid after your death.

Financial Advisor Alert

If your married couple clients own way less than their combined $10,900,000 lifetime exemptions, then that hard estate tax work isn’t really so hard. All they need to do is (1) put in provisions in their Living Trust, which give the surviving spouse the option of splitting the trust estate into an ...