Friday, December 17, 2010

Estate Tax...the final answer...or is it?

Well, it's finally done.  The estate tax ticking timebomb has been diffused...for a while at least. 

Both houses of Congress have passed the Bill and all that is needed is the President's signature to make it law.  Certainly we should all be relieved that our taxes are not going to increse in a few weeks.  Congress also addressed the Estate Tax.  We will have an Estate Tax on January 1 but the exemption amount will be set a fairly comfortable $5 million or $10 million for a married couple.

This clearly takes the vast majority of estates out of the taxable realm.  The really good news however is that the new structure also provides exciting and unique planning opportunities for clients.  With the reunification of the gift and estate tax systems, the lifetime gift tax exemption is now a whopping $5 million.  A carefully crafted gifting strategy could provide spectacular results.  I strongly recommend each of my clients to take the time to set an appointment and come on in for a review.  New clients are also encouraged come in for a no-charge consultations to explore how this new tax structure could benefit them.

As always though, there is a downside.  Congress did not permanently fix the problem; they only extended this law for two more years, so don't wait.  Procrastination is not recommended.  Who knows where Congress will take us next time!