Who Should Pay Your Estate Tax on Your Retirement Accounts

AuthorSeymour Goldberg
ProfessionSenior partner in the law firm of Goldberg & Goldberg, P.C., Woodbury, New York
Pages10-10
10
WHO SHOULD PAY
YOUR ESTATE TAX ON
YOUR RETIREMENT
ACCOUNTS
An interesting and serious problem may exist when there are significant
retirement assets in your estate that are subject to estate tax. The estate
tax may include both federal estate tax liabilities and state estate tax lia-
bilities in a number of states.
There are several reasons why estate taxes may be triggered on these
retirement assets. These reasons include:
1. The estate tax on the retirement assets may be triggered because
there is no surviving spouse, and therefore no marital deduction
is available on the taxpayer’s death to eliminate the estate tax
liability.
2. The estate tax may be triggered because there is a marriage that
is subject to a prenuptial agreement and hence there is no marital
deduction or a limited marital deduction.
3. The estate tax may be triggered because the federal estate tax ex-
emption is not sufficient to eliminate the federal estate tax liability.
4. The estate tax may be triggered because the state estate tax ex-
emption is not sufficient to eliminate the state estate tax liability.
The state estate tax exemption may be less than the federal estate
tax exemption.
5. The estate tax may be triggered because an IRS estate tax exam-
iner audits the estate and increases the estate tax liability.
6. The estate tax may be triggered (in certain states) because a state
estate tax examiner audits the estate and increases the state estate
tax liability. This audit may in turn increase the federal estate tax
liability as well.

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