When it came to the federal estate tax, President Bush advocated a simple proposal during his campaign last year: Repeal it. But now that he's taken office, the estate-tax issue isn't so simple anymore.

And that has made life complicated for some advisors and their clients.

Although Bush continues to push for a gradual phaseout of the death tax over the next eight years, observers consider the possibility of repeal all but dead. In Congress, Republicans and Democrats continue to debate the issue, with each party coming up with a variety of proposals. On April 4, the House approved legislation to phaseout the tax, with a repeal in 2011.

Some type of reform is indeed expected to happen. But what form it will take and how soon it will occur is far from clear.

That means estate planning has, at least temporarily, turned into a bit of a waiting game for financial advisors and their clients. For example, what does an advisor do when a client wants to make a charitable gift for tax purposes when possible reforms could make the gift unnecessary later?

Some advisors say they are putting long-term estate-planning decisions on hold until estate-tax reforms play out in Washington. "It has caused us to, in a few cases, talk to clients about the idea of holding off on some of the more complex irrevocable structures," says Kevin Gahagan of Boone Financial Advisors in San Francisco.

Some advisors and attorneys are telling clients to wait on charitable giving-lending credence to the argument that repeal would be a blow to nonprofits that rely on donations. "Where the primary motive is estate-tax avoidance, then we are talking to clients about seeing how the next nine to 12 months play out," says Gahagan. "If the tax is repealed, their underlying rationale is no longer valid, and you're going to have a pretty unhappy camper (if the gift was made)."

Some advisors and attorneys also are telling clients to hold off on:

Qualified Personal Residence Trusts, which are commonly used by parents to transfer homes to their children without estate taxes being applied.

Family Limited Partnerships, often used by high-net-worth clients to disperse assets among family members.

Unified Credit Shelter Trusts, which are used by married couples to maximize the amount of tax-free assets that can be left to their children.

Irrevocable Life Insurance Trusts, which pass insurance proceeds, free of estate taxes, to beneficiaries.

The problem, advisors say, is no one knows how the federal estate tax will look by year's end. It is widely expected, for example, that the individual exemption will be increased from its present $675,000. But by how much, and how fast, is not known. Proposed increases have ranged from $2 million to $6 million. Under current law, the exemption is due to increase to $1 million in 2006. There's also talk of scaling back the tax rate itself, which now ranges from 37% to 55%.

For many clients, their susceptibility to estate taxes will depend where the line is drawn on exemption increases. Even in the unlikely event that a phaseout is adopted, few seem to expect it would run its course.

Tom McFarland, president of The Darrow Co. in Concord, Mass., says confidence in a long-term phaseout being completed is so low he's heard attorneys talk about using a "repeal" as a window of opportunity to move client assets into offshore trusts. "I don't think we're going to live long enough to see the estate tax fully phased out," he says.

The situation is toughest for older clients who don't have a lot of time left to plan, says Dennis Belcher, vice chairman of the real property probate and trust law section of the American Bar Associa-tion. He tells of one client, an 86-year-old woman whose husband recently died and left an estate worth $10 million. A decision on whether to dilute her estate through the use of taxable gifts has been put on hold. "The client is sitting tight doing nothing," Belcher says. "Uncertainty is always bad for clients."

In the political give-and-take involved with crafting legislation, there's also the unsettled question of what benefits will be taken from clients. One possibility is that estates will become more susceptible to capital-gains taxes as estate taxes are scaled back. Certain tax provisions, those that grant favorable treatment to the QPRT and family limited partnerships, for example, could conceivably be axed, observers say.

Not all advisors are taking a wait-and-see approach with estate tax reform. Some, knowing it's impossible to figure out what changes will be made, say they are coping with the situation by conducting business as usual. Uncertainty "tends to get people to sit on their hands a lot. That's probably the worst thing they can do," says Chris Cooper, president of Chris Cooper & Co., a financial advisory firm in Toledo, Ohio.

Jack Canata, a financial advisor with Lincoln Financial Advisors in Chicago, says suspending action on things such as family limited partnerships could be self-defeating if the partnerships are removed from the tax code. "If (clients) have been thinking about this, now's the time to do it," he says.