Estate Tax Limbo Should Prompt Action

by Stephen Benevento, Senior Administrative Officer

From the Summer 2010 issue of Values

We are halfway through the year and still no action by Washington regarding the estate tax. The Congress has been too busy dealing with economic crises, health care, and the like to put the much needed focus on the estate tax. Under current law the estate tax has been repealed for 2010 and then returns to 2001 levels ($1 million exclusion) in 2011. Many experts believe that the estate tax exemption will be retroactively reinstated to the 2009 level of $3.5 million for 2010 but the fact remains that no one knows the outcome for sure.
 
But Congress’s inability to get its act together should be no excuse for any of us to avoid reviewing our estate plans. In fact, just the opposite is true. With all the uncertainty surrounding this issue it is more important than ever to review your current plan and documents. For example, the drafting of your trust may not have considered any of the changes now being debated. This could result in a distribution of your wealth that is inconsistent with your intentions. It also increases the risk of unnecessarily paying higher taxes.
 
When reviewing your trust documents, take the time to give your entire estate plan a check-up. Start by making sure your basic documents are up to date: durable power of attorney, beneficiary designation forms (for both IRAs and other retirement plans), health care proxy, and your will. This is also a good time to review your charitable intentions to ensure they will be part of the legacy that your estate plan helps provide.

 

 

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