Your recently deceased (2022) Texas client had an interesting array of assets totaling about $12 million, and his wife had predeceased him in 2014- no estate tax return had been filed for her since he understood the estate to be below the then approximately $5 million threshold back then due to the poor stock market. The assets at his death included a highly appreciated family farm with a small but quite functional house, barns, etc, a sizable highly appreciated stock portfolio, a home in the city and second vacation home in Colorado, a car, two trucks, and a trailer, a farm tractor, a run about the vehicle for the farm (called a gator) and the usual farm type items, including cattle, both bought and produced, a few miniature donkeys, hay equipment, and he owns a few mineral interests on the farm. 

Also, a few dogs and cats enjoy the place as well! He was most fortunate and only had a small mortgage on the farm, everything else was debt-free. He had been killed by a drunk driver, who seems to have plenty of insurance and the lawyer was hot on the drunk’s case. Your client didn’t do any estate planning despite your hassling him during his life, other than owning a $1 million life insurance policy originally payable to his wife, but with a contingent beneficiary of his children (of which he had two adult children). 

He was originally going to use it to pay estate taxes but never set up an insurance trust (which means it is included in his estate). Please comment on the following: What clear problems may exist in him not having an estate plan? What valuation issues seem evident? What specific federal estate “inventory” items might logically be included in his estate? Why is there so much concern and emphasis on asset inclusion and valuation in an estate? Could this thing called portability be an issue? What is its impact, if any, and why? What are the basic requirements of portability, whatever that is? Finally, are there reasons why or why not an estate tax return should be prepared? (This question will obviously be a much longer answer than the others). Understand, I do NOT want an estate tax return prepared, I want issue identification.

When and why would you consider alternative valuation of an estate six months after death? What are the general rules for such valuation?

Answer rating: 100% (QA)

ANSWER Some of the clear problems that may exist in this situation include the lack of an estate plan which can lead to a number of issues such as the distribution of assets not being clear problems w... View the full answer