An Illinois woman inherited not quite $100 million this year. Estate taxes could consume 53 percent, 45 percent, 16 percent or none of it, depending on whether the federal and/or Illinois estate taxes -- which both lapsed on Jan. 1, 2010 -- are reinstated retroactively. "It's wacky to have so many scenarios and not know what the tax is," complains Richard A. Lang, a Chicago partner of McDermott, Will & Emery representing the estate.
You're not crying for the heiress or her lawyer? Then consider another Lang client, a widow trying to divide her late husband's modest estate with the children from his first marriage without incurring ill feelings or big lawyers' bills. The husband's will was tied to the defunct federal estate tax. Now, by one legal reading the widow gets everything outright. By another, all the assets go into a trust that ultimately goes to the children, with the widow having access to the trust's earnings (and, if need be, principal) while she's alive. "This is going to be worked out," Lang vows.
via abcnews.go.com
For us in Connecticut, we have the added fun of working with the probate courts to facilitate the 2011 consolidation. Smaller courts which will be closing shop early next year do not want estates left open, if possible, before handing cases off to the new regional courts. Executors for estates on the edge of federal taxation likely being advised to wait until Congress finally acts (or not acts) rather than distribute out assets to beneficiaries (running the risk of incurring tax liability and having no assets on hand to cover the bill).
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