Estate Tax Video Update 12/15/2010

Jack Kingston Says Estate Tax Reform Not Likely This Year

We've been wondering for about 12 months now what's going to happen with the estate tax after the 2010 repeal.  We thought that Congress would extend the 2009 exemption and tax rates before the end of 2009, but to our surprise, Congress did nothing.  Since then, we've been constantly monitoring the situation thinking that something would happen.  Now it's October and still no action.  Last night, I had the good fortune to run into our First District Congressman Jack Kingston and I thought well, now I have the opportunity to ask a Congressman what he thinks will happen, so why not.  I asked Mr. Kingston if he thought we would see any action on the estate tax this year.  He replied "I don't know."  He said that the Senate keeps holding up any reform, and he doesn't see much hope that something will happen this year.  Seems he's as confused by what's happened as the rest of us.  He added that he was in support of a $5 million exemption and a return to the old step up in basis rules.  He further said "If the Republicans are elected, we will take action immediately."  He felt like they could get something done before April.  So, while things are still unclear, and trying to counsel clients on the estate tax remains difficult in light of the uncertainty, if we do return to a Republican majority in November, we should get some clarity relatively quickly.

Last Will and Testament or Living Trust - Get SOMETHING Done!

Somewhere around 70% of American adults do not have any sort of meaningful plan in place to protect themselves and their loved ones in the event of incapacity or death.  That means they have no last will and testament, no living trust, no power of attorney.  As we sometimes see in the news, and as we know in the backs of our minds, leaving this important part of your life unattended is dangerous.  You risk leaving loved ones confused, creating unnecessary hassle and expense for those you leave behind, and having your last wishes left unfulfilled for not having communicated them to your friends and family.

Add to that the nasty specter of giant estate taxes (with rates as high as 55%) and now is truly the time to be sure your planning is in order.  As regular readers of this blog know, the federal estate tax is about halfway through a one year repeal.  The way the repeal came about, and the laws underlying it, are already creating quite a mess for some families.

Now, it is looking more and more likely that Congress will do nothing to address the estate tax mess this year.  In fact, a deal brewing between Senate Democrats and Republicans to address the matter has now fallen apart.  Therefore, it seems more likely that in a little over seven months, the amount of assets you can leave to anyone you'd like when you pass away (without paying estate taxes at very high rates) will be significantly reduced.

For most families, this is not a problem without a solution.  A qualified estate planning attorney can help you to put together a plan to shield your assets from much or all of the estate tax burden your loved ones may otherwise be forced to carry.

The time to get in touch with your estate planning attorney is now.  He or she can put a flexible plan in place which will maximize your estate tax savings even if Congress takes no action at all to fix the looming estate tax problem.