YOU CAN’T TAKE IT WITH YOU
Excessive estate taxes pose a major problem to many estates, and in some cases, may even be eliminated!
Also included as part of estate planning are ensuring that your assets go where you want them to, simplifying the transfer of your assets to your beneficiaries, and minimizing family conflict. A death can do strange things to the surviving family. I have seen more than one family torn apart after the death of a loved one. By providing a plan that specifies where your assets are to go, you won’t be making the executor of your estate the “bad guy.” Family bitterness and jealousy are only two things that can be prevented by proper estate planning. You can also avoid leaving family members with financial insecurity and illiquid assets, leaving assets to minors who are incapable of handling them, and having improper distribution of your estate.
Estate planning can be as simple as a living trust and a will. Or, it can involve gifting and charitable remainder trusts. The more assets you have, the more important estate planning becomes. For those peo- ple with a high net worth, estate planning is especially important. But there are also a number of people who are in dire need of estate plan- ning and may not even know it. Couples who are not married must do some estate planning, if they hope to provide for the surviving partner after the other’s death. The courts will not take special consideration if these couples haven’t put their desires into legal documents.
During the year 2001, Congress passed a large tax cut for the Amer- ican people. As part of that legislation, they also overhauled the estate and gift taxes, making estate planning much easier for Ameri- cans, including eliminating the estate tax by the year 2010. Congress has also enacted a declining scale for the generation skipping tax (GST), concluding with its eventual repeal in the year 2010. How- ever, the gift tax will be sticking around. While these taxes are being phased out and even eliminated, the new law has a sunset provision, just like the income tax portion of the tax cut. If Congress does not enact a new law upholding these changes during 2010, the tax laws will be restored to present conditions. That is, the GST and estate tax will be reinstituted in 2011.