Estate and 706 Form

[S T]

I have a taxpayer - husband and wife in their 80's - husband passed away in late Nov 2013. Has a joint living Trust (Calif) well under the limits of assets to file a form 706 -- I believe assets are something around less than $ 1.5 M, however -----

Surviving spouse met with attorney that originated the Living Trust, received a phone call today from Attorney, to see whether or not I could prepare the 706 form - I stated I did not think it was necessary knowing the value of the assets, however, the attorney believes it is -- to protect the marital deduction on the first to die. and then further since we do not know what the future rulings will be with the $ 5 Mil exemption (attorney's words)

I indicated with inventory, appraisements, etc - yes I could prepare, I am thinking the attorney is building in a large fee to separating into Credit Shelter Trust/Residurary Trust and then the Marital Trust. Guess I will find out more when I receive the direction from the Attorney, client is paying $ 5,000 to attorney for this ---- and then I have my fee on top of. (per client)

Any guidance and what I need from Attorney that is earning the "big bucks"
I know I need a copy of the Trust, Inventory and Appraisement, list of beneficiaries, etc - other items or questions. not sure what will be passed to a Credit Shelter Trust except maybe some Partnership Investments in Real Estate (that might be an issue) there ar 4 of those and they are in the Living Trust.

I am pretty much thinking out loud and posting tonight - so hoping for some guidance for direction. Guess I just might have earned some extra fees due to some extra returns We will see.

Thanks for any insight and direction, been a while since I had to prepare one of these forms,


Sandy

[AJsTax]

706 is required

The 706 is required in order to transfer the unused balance of the deceased taxpayer's exemption to his spouse. Otherwise it will be lost.
As far as to what you need? Hard to know without seeing what is in the Estate. but you already have a handle on that part.

[Roberts]

Per form 706 instructions:
For decedents who died in 2013, Form 706 must be filed by the executor of the
estate of every U.S. citizen or resident:
a. Whose gross estate, plus adjusted taxable gifts and specific
exemption, is more than $5,250,000; or,
b. Whose executor elects to transfer the DSUE amount to the surviving
spouse, regardless of the size of the decedent's gross estate. See
instructions for Part 6—Portability of Deceased Spousal Unused
Exclusion and sections 2010(c)(4) and (c)(5).


If the executor and their legal representative wishes to utilize option B, it isn't your job to inform them otherwise. There may be details in option A that you are unaware of at this time.

[New York Enrolled Agent]

I stated I did not think it was necessary knowing the value of the assets, however, the attorney believes it is -- to protect the marital deduction on the first to die. and then further since we do not know what the future rulings will be with the $ 5 Mil exemption (attorney's words)

As previous posters have indicated, you file the return to keep the portabilty of the unused decedent's unified credit. However, the attorney should be aware the unified credit $5 million was made permanent under the tax law and will increase with inflation. For example, $5,340,000 in 2014.