Estate Planning — Approaching 2010
By: Jeremy Lantz of Lantz & Reeves, P.C.
3735 Cherokee Street, Kennesaw, GA 30144 • Phone: 770 424-8131

As we approach 2010, does estate planning become more interesting? Well, if you find "complicated" interesting, then yes. You may remember the Economic Growth and Tax Relief Reconciliation Act of 2001 began increasing the amount of property you can transfer tax free at the time of death, culminating in 2010 with the one-year repeal of the estate tax. Many estate planners anticipated there would be permanent legislation that would create higher exemptions or lower rates by 2011, rather than a reversion to pre-2001 estate tax laws. While that could still happen, and assuming you do not plan to die in 2010, the question still remains, "What do I do right now?"

If you have $3.5 million or more in assets, you most likely are going to have an estate tax problem whether new legislation passes or not. If you are right on the cusp from $1 million to $2 million (or $3.5 million, the exclusion amount in 2009), you may not have a taxable estate now, but you may come 2011. Not only do you need to plan now, but you need to plan on updating your estate plan as the tax laws change. And they will change, whether by new legislation or reverting to pre-2001 estate tax laws. The best advice in the next few years is to be flexible. Spend some time with your estate planning attorney to discuss your current and anticipated family financial situation and goals. While there is a chance there may be more legislation in the next three to four years that will affect your estate plan, you should plan as if the laws will revert to pre-2001 status as scheduled.

For those with estates in excess of $1 million, you should shelter assets through trusts in your Will to take advantage of the maximum amount you and your spouse can pass estate tax free. It also means continuing, to the extent possible, to make sure that you and your spouse own roughly the same amount of assets in your individual names. You should also continue to consider strategies to reduce the size of your estate by making transfers of your assets to your heirs during your life and out of your taxable estate. If you continue to own life insurance in your own name, consider moving it from your estate by transferring it to an irrevocable life insurance trust or directly to the beneficiaries. Now may be a good time to begin contributing to your grandchildren's 529 Plans for education, or paying for medical and education expenses directly on behalf of your loved ones.

Simple estate tax planning and setting up the necessary trusts to shelter the amount you can transfer tax free should not adversely affect you, even if tax laws change allowing you to transfer more tax free at the time of death. You may find that you "overplanned," but the result is certainly better than not planning at all and finding you or your heirs have an estate tax problem in 2011. Setting up your estate plan and putting strategies in place to minimize estate taxes takes time; however, waiting until 2011, or for Congress to act, should not be an option.

With so much uncertainty in estate law, you can see why you and your heirs should be protected with a wealth transfer plan now. You should consider one that is flexible enough to meet your needs today, and both your changing needs and changing laws tomorrow. If you want to discuss your estate plan, your Associate will be able to help you to properly structure your assets and put you in touch with estate law professionals to help you with your overall estate plan.

For more information, please consult with your estate planning attorney. You may also contact The Henssler Financial Group at 770-429-9166, or comments@henssler.com.