Don’t be lulled into a false sense of security when it comes to estate law. That’s the lesson from a recent article out of Investment News, a gentle reminder that the estate law trap may be closing soon.
As many taxpayers are well aware, the current laws related to wealth transfers (i.e., the estate tax, the gift tax, and the generation-skipping transfer (GST) tax) were set just over a year ago in the final days of December. Those laws offered fairly generous policies, effective rates, and exemption amounts, generous enough to surprise even the experts and to calm the thousands of families just spared from the estate tax. According to a Trusts & Estates magazine survey of legal and financial advisors, over the past year tax avoidance dropped from the primary concern of many to the fourth place concern.
The gentle reminder: The laws are only good until 2013 and, barring any sudden outburst of non-partisan productivity at Capitol Hill, are set to expire within a year’s time.
Snap, the tax trap shuts!
While tax avoidance need not be your primary concern when it comes to planning, it’s likely to be a very important factor for purely economic reasons and, since estate planning is about the long haul in the first place, you can’t base it on short-term laws.
Of course, however you rate the importance of tax avoidance when it comes to estate planning; it is rarely the sole concern. This lull in the taxes also can help clarify your goals in other areas.
If tax avoidance dropped from number 1 to number 4, what did people start thinking about? According to the survey, people began planning in earnest to avoid chaos and discord among beneficiaries, to avoid probate, and to protect children from mismanaging their inheritance.
To plan your estate with tax avoidance strategies, contact Meier Law Firm today.
Laura K. Meier, Esq.
Reference: Investment News (January 15, 2012) “Estate tax lull may trap wealthy”