According to this article in Financial Advisor magazine, the President's new budget includes some significant changes in the estate planning and estate and trust settlement arena. 

The one I find most interesting is the proposal to require executors, personal representatives or successor trustees to provide heirs and beneficiaries with documentation of the basis of an inherited asset.  I think it may make for good tax policy overall, but it's going to add to the already heavy responsibilities of the personal representative or successor trustee in the probate process. 

Consider this example, Joe has done excellent planning.  He had a living trust drafted by an experienced estate planning attorney.  He had a picture framing business that was operated as a Colorado corporation and some other assets that didn't reach the threshold to file an estate tax return. 

In his trust, Joe chose to leave all of the stock shares in the picture framing business to his daughter LeeAnn.  He named his brother Anthony to be the successor trustee.   Anthony doesn't know the exact value of the small business, but he knows enough about the ballpark value to know there is no reason to file an estate tax return.  Under current law, Anthony might decide not to increase the trust's expenses by having the picture framing business appraised.  After all, the business isn't going to be divided and its value doesn't affect how the rest of the trust is distributed.  Yes, LeeAnn may benefit from knowing the value of the business to establish her basis in it for capital gains tax.  However, since LeeAnn is the one who will benefit Anthony may reasonably conclude she can get the business appraised herself. 

Under the proposed law, Anthony will have to get the business appraised because he will be required to give LeeAnn documentation of her basis. Unless the living trust directed otherwise,  Anthony will have to take the cost of the appraisal from the entire trust, reducing the proceeds available to the other heirs even though they don't benefit from the appraisal.  Anthony may also reasonably decide he has to charge the estate for his time in hiring the appraiser.  Anthony may have to pay more to an accountant or attorney prepare the documents he needs to give to LeeAnn. 

That's more work for the successor trustee, more work for the lawyers, more work for the accountants.    Less money for the beneficiaries. 

Note these aren't the "costs of probate" because they will be required expenses even if a living trust is used.  That leads to a question:  Who prepares these reports when an asset is inherited through joint tenancy or a Colorado beneficairy deed?  Then there isn't anyone in charge of distributing the asset, it just passes as a matter of law.

Some might say it's getting harder and harder just to die these days.