Friday, February 03, 2012 Estate Tax Watch 2012At 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.
Tuesday, March 29, 2011 Why I Do Not Use An Estate Planning Binder / Kit
When I initially started doing Estate Plans I spent a lot of time preparing Estate Planning Binders / Kits. I felt this was an “industry norm” that was expected. However, as my Estate Planning practice expanded I also began to encounter many of these binders from clients seeking a review of their existing Estate Plans. What I found was that these Estate Planning Binders became (over time) a hodgepodge of financial and legal information about the clients that often made little sense. It was common to find incomplete sets of Estate Planning documents. Often a Tax Return or two would be stuffed into the Binder, or maybe the paperwork from a mortgage refinance.
Probably the most common thing I have noticed about Estate Planning Binders is that the most important document – an original copy of the Trust was missing. That makes sense. The Trust is the document that your bank, broker or escrow company would want to see. Unfortunately, it was the document that often did not make it back into the Binder.
Those issues aside there are two more important reasons I do not use Estate Planning Binders.
1. The typical Estate Planning Binder really stands out. It is unlike any other books or documents you are likely to have around your house. My fear is that if you have a nosy child, relative, babysitter, housekeeper, etc. their curiosity may very well get the best of them and they will ultimately be tempted to peak.
2. More importantly, I fear that an Estate Planning Binder is a dangerous tool for identity theft. It will likely serve as a perfect roadmap to your financial world if it is ever lost or falls into the wrong hands.
I deliver my Estate Planning documents in simple paper format and suggest that you tuck them into a safe place where they are not likely to be noticed. It is important to remember that the originals are not going to be necessary and that copies or electronically stored images of your Estate Planning documents will always work.
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