A story published today by Forbes.com reports that unmarried homeowners often pay much higher estate taxes when they die than do their married counterparts.  Here is what the story says:

Your widowed father just died, leaving an estate valued at well over $1.5 million, including the house where you grew up and spent every holiday. He never remarried but as one of his heirs you may soon be wishing he had.

As a single person, your father's estate could be taxed as high as 48%, leaving you and his other heirs with a whopping tax bill. And that house? Most likely, soon it will be just another memory.

Estate taxes aren't a pressing concern for most Americans. In fact, only a little over 2% of all estates are large enough to be taxed, according to the U.S. Internal Revenue Service. (The 2% only includes estates woth $1.5million or more.)

Still, of the thousands of people that do pay estates taxes--a total of 51,159, or 2.18%, out of 2.3 million estates left in 2000 were taxable, according to the IRS--estates owned by single or unmarried individuals take a much bigger tax hit than married owners.

While these numbers seem comparatively small and skewed toward the wealthy, it could be a growing concern as the number of unmarried households is on the rise, particularly as housing prices remain strong. According to the U.S. Census Bureau, there are about 5.5 million unmarried-partner households, up from 3.2 million unmarried-partner households in 1990. Often, the majority of the deceased's net worth is in real estate.

A husband or wife can leave their spouse an estate of an unlimited size and not pay a cent in federal estate taxes as a result of the unlimited marital deduction. In contrast, an unmarried person's estate that was not left to a charity or placed in a charitable trust, an estate left from a single person to a non-spouse--even a child or a parent--could be taxed between 25% to 48%.

"It's a huge disadvantage for singles," says Mary Randolph, legal editor at Berkeley, Calif.-based Nolo, a self-help legal publisher and legal software provider. "You could have a billion-dollar estate and leave it to your spouse, and there's no tax on the transfer. Of course, it really only delays the tax payment, because when the second spouse dies he or she will have to pay it. But that does give that spouse time to plan."

While the current laws seem to be stacked up against singles, tax attorneys say that there are some options for single people, and with some planning, anyone concerned with estate taxes can take steps now to lessen the blow for their heirs later.

"While single people may not have the same options as married people, they can still make gifts the same way that married people can," says Paul Karan, a trusts and estates lawyer with New York-based law firm Todtman, Nachamie, Spizz & Johns, P.C. "There are also techniques single people can employ involving trusts."

Depending upon the circumstances, Karan says a home can be placed into a Qualified Personal Trust Residence--available to married couples as well--which allows the property owner to live in and enjoy the home while he or she is still alive, and at the end of a specified period of time, the home transfers to the designated recipient in the trust, and the home is no longer part of the owner's estate. If the original owner chooses to live in the house after the property has been transferred to the trust, he or she must pay fair market rent.

"The trick is not to die before the property is transferred," says Karan. "Otherwise, for tax purposes, the house is taxed as if it's part of the estate."

The primary tax advantage to a QPRT is that the value of the property diminishes over the course of time it is used by the owner. For example, if a parent owns a house that's worth $1 million, and continues to use it for ten years before it is transferred into a trust, the value of the property is a fraction of what it would be if it were transferred at the time of one's death, because the value of the person's right to live in the residence for the specified period of time is subtracted from the value of the house. A house worth $1 million on the open market might be taxed as a $500,000 gift if it were placed in a QPRT because the value is discounted based on the time it is used by the owner. If however, the person dies before the fixed term has expired, the house would be taxed according to the fair market value.

Karan also suggests that unmarried couples who are living together draw up a legally-binding cohabitation agreement to avoid any confusion if one of them dies. The cohabitation agreement could specify matters such as how property is distributed in the event of a death or a breakup; who will pay outstanding debt.

"Two single people who are living together and make provisions for each other can enter into a cohabitation agreement, which is perfectly legal. The purpose of the agreement is to spell out who is contributing what, and what happens when they split up or one of them dies."

Clearly, single people aren't completely helpless when it comes to estate planning. Still, that doesn't stop civil rights groups from arguing for some tax reform. Thomas Coleman, executive director of Glendale, Calif.-based Unmarried America, a non-profit civil rights group that represents single Americans, says the estate tax doesn't affect many of its members, but it's a source of contention.

"As a matter of policy, we don't think it's fair to award people in the area of taxation because of marital status," Coleman says. "We may suggest that the marital exemption is eliminated. It's from a different era when women didn't work and they were dependent on men. It doesn't seem fair that in some cases, a parent can't leave any wealth to their children without the government grabbing at it."