Lesson III: I Went to ABA Trust School and This is What I Learned - Filing Form 706 is Like Opening a Michelin-Starred Restaurant

During the American Bar Association's Trust School Level II, I was in the session about Form 706 preparation and compliance strategies. As the instructor walked through Schedule after Schedule, regulation after regulation, I had one of those moments when how to manage a  really complex process suddenly clicks into place.

You know how some people describe filing a Form 706 as "just filling out a tax form"? Those people have clearly never filed a Form 706. What I realized sitting in that session is that shepherding a U.S. estate tax return isn't like filling out a form at all - it's like operating a three-star Michelin restaurant where every plate must be flawless, precisely timed, and completely defensible under scrutiny.

The more I thought about this analogy, the more it made sense. In the same way a three-star kitchen lives or dies on mise en place, sourcing, execution, and service, a Form 706 lives or dies on scoping, valuation, elections, and filing discipline.

Mise en Place: Scoping Your Service

Trust School reinforced something fundamental - a three-star service starts long before the first guest arrives. The chef locks the menu, assigns stations, and the expediter plans the night's rhythm with military precision.

For Form 706 preparation, mise en place is that critical upfront intake phase. Practitioners need to confirm who their "chef" is (the executor under IRC § 2203), understand what their "dining room" accommodates (gross estate under § 2031), and identify their guests' specific needs (beneficiaries, marital status, charitable intent).

The common challenge here is treating the timetable as flexible.

Lock the Schedule Early

Form 706 is generally due nine months after date of death with a possible automatic six-month filing extension via Form 4768. But here's the strategic decision that Trust School emphasized: decide early whether portability will be on the menu.

The portability election generally requires a timely filed Form 706. However - and this caught my attention during the course - if the estate isn't otherwise required to file, Rev. Proc. 2022-32 gives executors up to five years to elect portability with the required statement at the top of the return. That's a significant planning opportunity that too many attorneys are missing.

From a technology perspective, this is exactly why we built systematic deadline tracking into Estateably. It's not just about remembering the filing deadline - it's about surfacing these strategic election opportunities at the right moment in the process.

Sourcing Your Ingredients: The Valuation Foundation

Three-star kitchens build relationships with the finest suppliers because provenance matters. The "provenance" for Form 706 is the substantiation behind every single asset and deduction.

Real property needs rock-solid appraisals - either date-of-death values or alternate valuation date within six months under § 2032. Closely held businesses require valuation work that can withstand IRS scrutiny under § 2031 fair-market-value principles. And don't forget about special-use valuation possibilities under § 2032A for qualifying farms and certain real property.

But here's what the Trust School sessions made clear: income in respect of a decedent (IRD) positioning and § 691(c) deduction mechanics often get treated as afterthoughts. Every retirement account, every deferred compensation arrangement, every installment sale - these aren't just line items. They're ingredients that require specific handling and documentation.

The liability side deserves equal attention under § 2053 for administration expenses and claims against the estate. Every document needs to be tagged and organized like ingredients in a walk-in cooler - accessible, labeled, and ready for inspection.

Menu Design: Your Election Strategy

This is where the analogy really clicked for me. World-class chefs design menus that balance acid, fat, and heat. A Form 706 "menu" balances elections and deductions to create something cohesive and defensible.

The marital deduction strategy (§ 2056) and QTIP planning (Schedule M) determines how much passes to the surviving spouse and how practitioners maintain control over those assets. The charitable deduction (§ 2055) sets up philanthropic planning on Schedule O.

Then there are timing elections - alternate valuation (§ 2032) and special-use valuation (§ 2032A) - that can dramatically affect both the tax outcome and future flexibility.

Don't overlook payment relief options: § 6166 installment payments for closely held business interests, § 6161 discretionary extensions of time to pay (requested on Form 4768), and § 6163 for certain reversionary or remainder interests.

The objective is elegant: a coherent election strategy that reduces tax burden without compromising future planning flexibility.

The Service: Schedule by Schedule Excellence

In a three-star restaurant, each course arrives at the precise temperature, properly plated, and perfectly timed. On Form 706, each Schedule must be complete, consistent, and supported with proper citations.

• The Foundation Courses (Schedules A & B): Real estate (Schedule A) and stocks and bonds (Schedule B) require crisp appraisals and current broker statements. These must harmonize perfectly with Schedule D (life insurance) and Schedule E (jointly-owned property) so that titles and beneficiary designations tell a consistent story.
• The Complex Course (Schedule F): This is where challenging assets live - art, collectibles, digital assets, and interests not classified elsewhere. For art and similar high-value items, practitioners need qualified expert appraisals with required statements, and they should be prepared for potential Art Advisory Panel review.
• The Surprise Courses (Schedules G, H, and I): These are the schedules the IRS examines first - transfers during the decedent's lifetime, powers of appointment, and annuities. Pre-mortem transfers, retained powers, and beneficiary designations under §§ 2035–2042 can pull value back into the gross estate in ways that surprise unprepared practitioners.
• The Essential Counterpoints (Schedules J & K): Funeral and administration expenses (Schedule J) and debts, mortgages, and taxes (Schedule K) provide crucial deductions under § 2053, but they require contemporaneous documentation that reads like a paper trail an examiner can follow.
• The Signature Dishes (Schedules M & O): Marital deduction and charitable deduction schedules require drafting precision that would make a sous chef proud.

Everything must reconcile to the gross estate and taxable estate computations with cross-footing accuracy that would impress any expediter.

The Line Check: Consistency and Compliance

Trust School emphasized basis consistency obligations under § 1014(f) and § 6035. Where required, practitioners must file Form 8971 and furnish each beneficiary a Schedule A within 30 days of the Form 706 due date (including extensions) or within 30 days after filing if they filed late.

This seemingly mechanical requirement creates challenges because everyone is managing dozens of other deadlines and obligations. It's not a knowledge gap - it's an organizational challenge that better systems can solve.

Practitioners also need to verify beneficiary designations for retirement assets and ensure all titles align with what they're reporting across Schedules D, E, and F. Sloppy line checks lead to IRS math-error notices - the estate planning equivalent of cold plates leaving the pass.

The Final Inspection: Review Like a Michelin Inspector

Before any plate leaves the pass, the chef inspects every element. Do the same with Form 706: tie out all totals, cross-reference asset descriptions, ensure appraisals match schedules, confirm all elections are explicitly stated, and make sure explanatory statements read like clear, persuasive narratives.

Build the audit file like preparing for inspection: engagement letters, valuation reports, bank statements, legal invoices, and correspondence organized so a future examiner can follow the logic without confusion.

When the Inspector Arrives: Examination and Appeals

Even perfect restaurants get inspected. The IRS may review valuation methodologies, discount applications, and QTIP mechanics. Prepare the team (valuation experts, counsel) and documentation (narratives citing § 2031, § 2032, § 2056, § 2055, and relevant regulations).

If disagreements arise, Appeals becomes the inspector's debrief - where clarity and thorough documentation often resolve disputes more effectively than combative positions.

After Service: Post-Filing Management

Three-star teams debrief after every service. Post-706 filing, calendar these essential follow-ups:

• Request the Estate Tax Closing Letter (ETCL) via Pay.gov (currently $67 fee) at least nine months after filing
• Monitor any refund or additional assessment tied to later-resolved § 2053 claims
• Confirm portability elections if DSUE was elected
• Complete beneficiary communications, including basis statements for downstream tax returns
• Align any liquidity strategies with subsequent reporting to avoid mismatches

Common Ways to Lose Your Stars

• Missing the portability window: No timely return means no DSUE election - unless the estate qualifies for Rev. Proc. 2022-32's five-year relief for non-required-filing estates.
• Weak appraisals: Generic comparables without proper adjustments or stale effective dates invite re-examination.
• Inconsistent titles: Joint property and community property designations that don't match disclosures create audit targets.
• Ignoring IRD: Misstating retirement assets and missing § 691(c) deduction pairings cost families real money.
• Silent elections: Hoping an election is "implicit" in the return. It's not. Make every election explicit with proper citations.
• Cash-flow blindness: Discovering at filing time that there's no liquidity for tax payments. Plan § 6166 or § 6161 strategies early in the process.

What This Means for Modern Estate Practice

Trust School reinforced something I see in our Estateably user data every day: success with complex estate tax returns comes from building systems that support sophisticated thinking rather than burying it under administrative chaos.

A three-star Form 706 is "worth a special audit" - because it holds up under scrutiny. It arrives on time, every Schedule is perfectly supported, the election strategy tells a coherent story, and the filing process runs smoothly even under pressure.

When practitioners treat estate tax return preparation like haute cuisine - obsessive preparation, disciplined execution, and clear documentation - they don't just file a form. They create an experience that earns family trust, withstands IRS scrutiny, and honors the responsibility of stewarding generational wealth.

The legal framework is sophisticated and time-tested. The challenge is building practice infrastructure that matches that sophistication. Because in 2025, "I lost track of the deadline" or "I couldn't find the appraisal" shouldn't be reasons families lose wealth to preventable mistakes.

Clients deserve three-star service. The question is whether systems can support it.

Bon appétit - and bon compliance.

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Legal Disclaimer: This article is for informational purposes only and does not constitute legal or tax advice. Practitioners should consult the Internal Revenue Code, Treasury Regulations, and IRS guidance - or seek professional counsel - before applying these concepts to specific client situations.

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