Howie Asks Alan Lorber for Tax Advice Howie wrote: Alan Lorber (Howie’s elderly cousin) is very smart and very good at estate planning and tax matters, his specialty. His answer was more complex than my simple question. He would be happy to help if you would like to talk with him. What he does not know, he can readily find out. Date: Wed, 25 Jun 2003 18:54:30 -0400 (EDT). From: ALANL Subject: Re: - Life Insurance, Etc. To: hbaskin Hi Howie: Life insurance is subject to federal estate tax. But since it went to a wife, it qualifies for the marital deduction. Result: no tax. A more important question. Is Carole required to file a federal estate tax return? If her husband's estate exceeded a "certain amount", the answer is "yes" although there would not be a tax because of the marital deduction. The "certain amount" depends on the "gross" value of his estate for estate tax purposes and the particular year in which he died. I do not know if "the year he died" for federal estate tax purposes is the year in which he was declared dead, or the year he first disappeared. So E-mail me both years and also mail me a copy of the court order which determined he died. In determining the "gross" amount of her husband's estate for estate tax purposes, you must include, among other things, bank accounts, annuities, securities, real estate, IRA accounts, pension/profit plan funds, collections, and 1/2 of any property they owned with right of survivorship, such as a residence. I do not know if assets are valued at time or disappearance or at the time the court entered its order. - Alan Dear Howie, Thank you for inquiring about the necessity of a tax return on the estate. My CPA, who is a tax attorney, says that I don't have to pay tax on the estate, because it is calculated as of the day of death and since we had 5 and a 1/2 years to prepare for that, there was nothing left in "the estate" by the time Don was legally declared dead in December of 2002. He disappeared August 18, 1997. I am told that the IRS does not consider you dead until you are legally declared dead. There were a few million in assets still in the conservatorship, as of the end of last year, but those were all in trusts of which I was the beneficiary. The conservatorship froze those assets during the term of the past 5 years in the event Don should show back up and contest my rights. I had trust documents on each property, signed by Don, but our secretary and his kids were accusing me of having undue influence over Don since he couldn't read nor write. They hired a part time, hobbyist, document examiner who said, that the signatures "might not have been authentic." I hired two very large firms who said they definitely were Don's signature, plus I had the notary and the witnesses who all attested to the authenticity, so the only route the kids and Anne could take was to say that I unduly influenced Don to sign them. Had I lost that battle, then I would not have been able to be a co-conservator for the past 5 years and everything I had worked for would have been invested by the other co-conservator into safe things, like stocks, and in retrospect, what a loss that would have been. I consented to subjecting the estate to the co conservatorship and later was able to prove (what I believed to be) his incompetence and was awarded sole conservatorship. At the time of my consent there was over 2 million that was Don's, but I gave 1.2 to his kids and the conservatorship costs and fees and attorney fees ate up the other 1 million, plus. That left "the estate" owing me hundreds of thousands of dollars. We (the kids, the secretary and I) had all agreed to not include the insurance policy in the estate. Their attorney asked to set it up that way and mine said it didn't matter, so I agreed. We have each agreed to pay whatever our own portion of the tax is, if any. By exempting it from the estate, I don't know if there would be tax consequences on it now. My CPA tried to call me at