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Because of pending changes to the rules for estates, this planning is more
important than ever

For many taxpayers, dealing with the estate of a loved one will be the most complicated and confusing tax issue of their lives. Payne Financial Consulting helps executors and beneficiaries deal with the tax filings associated with estates and trusts.estates calculator We also offer assistance to taxpayers with planning their estates, considering the consequences of various elections, planned giving and succession planning for family businesses. The Challenge... Unfortunately, Congress complicated estate planning with its blueprint for big changes in the next few years. Since 2001, there has been much discussion regarding the estate tax and we expect that President Obama will push changes to the current situation. In a nutshell, here is Congress’ current plan:


The applicable exclusion amount eliminates estate tax for taxable estates under $3.5M (up from $2M in 2008).


The estate tax is repealed along with the rules regarding the step-up in basis at death. Instead, the estate tax is replaced with a capital gains tax regime where the assets in the hands of the beneficiaries have an adjusted basis which may or may not be the value at death.

At the end of 2010. The law increasing the exclusion for 2008 and 2009 “sunsets” and we return to the rules of 2001.


Taxable estates in excess of $1M will pay estate tax. For taxpayers owning a home in California, exceeding this limit will be relatively common.

We will keep abreast of changes in the structure of the estate tax under President Obama and are hopeful that the current situation will be rectified.

Protect Your Heirs.

To protect your heirs from estate taxes, probate fees and the difficulties associated with an unplanned estate, we strongly recommend implementing an organized, coherent plan.

Most estate plans concentrate on minimizing estate taxes and probate fees by utilizing a Revocable Living Trust. While we do assist with planning, we do not write trusts, but instead refer clients to estate attorneys. Properly funded Revocable Living Trusts can eliminate probate fees, ease the administration of your estate for your heirs and, in some cases, reduce the estate tax. In recent years, we have also seen more instances of trusts being used in the case of second marriages to protect the interests of children from prior marriages.


  • Preparation of trust tax returns (Form 1041). Trusts can continue for many years following the year of death. We prepare trust returns from inception through termination.
  • Preparation of estate tax returns (Form 706) and gift tax returns (Form 709)
  • Assistance with assembling lists of assets and liabilities
  • Division of assets between decedent’s now-irrevocable trust (sometimes called the Bypass Trust) and the surviving spouse’s still revocable trust
  • Preparation of decedent’s final income tax return (Form 1040)
  • Income splits between final Form 1040 and initial Form 1041 based on assets allocated to various trusts
  • Administering an estate and its trusts is complicated and time consuming. Payne Financial can explain the process, guide you through the necessary steps, and help you file all of the proper tax returns.