By: Martin M. Shenkman, CPA, MBA, JD
Estate Tax Repeal Is Effective Jan. 1, 2010
Is this real? What does it mean to you? To your heirs? Your clients?
√ How is your will impacted by estate tax repeal? Most wills and revocable trusts have formula clauses based on prior law estate tax exclusions. How does this affect those who inherit from your estate? It may not be just a tax issue. It could dramatically impact the division of assets.
√ Is your estate plan viable in light of 2010 changes? You should consult with your current attorney, estate planner, tax adviser, insurance consultant, CPA and financial planner, to determine what, if anything, you should do.
√Estate tax repeal is effective 1/1/2010. Should you plan or is this just a tempest in a teapot? If you immediately revise all of your estate planning documents to conform to the estate tax repeal landscape, and then Congress reinstates the estate tax, will you have to revise all your planning and documents yet again? Is it worth the effort and cost to revise your documents to endeavor to anticipate all the following scenarios?
√ New complex carry over basis rules will determine gain on the sale of inherited assets. If these rules remain law, every will and revocable living trust should be revised to address them. Executors and trustees will need powers and directions to allocate the new basis adjustments permitted. The gift tax is not repealed and remains at a 35% rate.
√While advisers all hope Congress patches the law quickly and retroactively, does the period from 1/1/2010 to the effective date of new legislation present a planning opportunity or an estate planning disaster waiting to happen?
√The January issue of Practical Planner newsletter will provide an analysis of the implications and planning options.
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