Friday, February 03, 2012

Estate Tax Watch 2012

At the present time the biggest risk is uncertainty and really only to a limited degree. While the Estate Tax Exemption has continually increased over the last 30 years, there seems to be no chance that it will be permanently decreased to something less than $3 million. Which would mean that a couple could shelter more than $6 million with very little work. The risk and uncertainty are about how we get there. The current $5 million exemption DOES expire this year. With the current atmosphere in Washington we have to assume that the unthinkable will happen and we will revert to the $1 million exemption for at least a few weeks and very likely longer. This puts wealthy, single, seniors at risk. Singles are more at risk because it is assumed that in the long term we will have a generous Estate Tax Exemption again and if your spouse passes away in early 2013 you would still have the Unlimited Marital Deduction to avoid Estate Taxes in the short term. So if you have a wealthy grandmother – get her to the Estate Planning Attorney soon! For everyone else, the issue is FLEXIBILITY. You need an Estate Plan that can handle an Exemption ranging from $1 million to $5 million.