Once again estate tax relief is being discussed in Congress, one of the unforeseen consequences is that for many people, already reluctant to solve estate planning problems, this gives them just another excuse to procrastinate. For any family that pays unwanted estate taxes, either their advisors were unskilled or the parents were negligently oblivious to the information provided by numerous print articles, books, news reports, seminars and advice from their professional counselors. Lately I've been receiving inquiries from litigation firms seeking referrals to heirs of families that have paid estate taxes and lost businesses or farms. After the dust from the great tobacco lawsuit war settles, the next target may be providers of estate planning solutions that didn't work as the heirs expected. I expect some are now concerned about heirs looking to correct errors of omission and commission when the tax bill comes due.
Advisors fail to use ways to make gifts to heirs of assets by using tax-free annual exclusions.
Advisors fail to test their client's tolerance for charity. Failure to make use of special tax elections like special use valuations or alternate valuation dates. Improper beneficiary designations for retirement plans and insurance have come back to haunt blended families when benefits are incorrectly paid to ex-spouses or unforeseen heirs. Owning insurance that improperly winds up being counted in the taxable estate can expose heirs to unnecessary tax. Incorrect use of irrevocable life insurance trusts.