I’ve written numerous posts about how the estate tax remains in flux. Right now the exemption, that is the amount a person can own when they die before being subject to the federal estate tax is $3,500,000. Next year (2010) that amount becomes unlimited, and the year after that it goes down to $1,000,000. No one (or very few people) actually think that this will happen == at some point, Congress will change the law to “fix” things.
But as Teresa Norton and Kristen Ingersoll, two estate planning attorneys in California wrote in the North Bay Business Journal, even if the exemption is set at $3,500,000 permanently, that does not mean that less wealthy people should put off, or forgo their planning. They write:
Assuming the estate tax is ultimately “fixed” by year end and the exclusion remains at least $3.5 million per person, many clients question whether they still need to undertake the sometimes arduous and often emotional task of estate planning. The answer is, of course, absolutely. First and foremost, estate planning is critical to ensure that your estate is distributed to the heirs and beneficiaries that you desire. . . Secondly, every solid estate plan should include powers of attorney to ensure that fiduciaries are nominated to handle financial affairs and make health care decisions for you in the event of incapacity. In addition, with the escalation of litigation in the area of decedent’s estates, attentive and deliberative planning is essential to minimize the risks of litigation among family members. Moreover, uncertainty often strikes when we least expect it. Thus, until the state of the estate tax is clarified in the coming months, and even more so thereafter, estate planning remains vital and essential.
Definitely good advice.