Congress hasn’t renewed the Economic Growth and Tax Relief Reconciliation Act of 2001, otherwise known as E. G. T. R. R. A. consequently the estate tax will go back to 55% again next year. Even small estates will have to expect a possible estate tax at death. With this in mind, it becomes imperative that individuals planning their estate, incorporate, in combination with basic revocable trust planning, several of the more advanced estate planning strategies.
While the the estate tax related reasons for proper estate planning are certainly valid, they should not be your sole motivation. Even while the E. G. T. R. R. A. was in effect, the more successful estate planning attorneys learned that proper estate planning was justified for reasons beyond purely tax savings. In the interim, while we await the decisions of our leaders we experience a continued uncertainty.
The estate tax will continue to be a hot political issue beyond 2010. There are way too many winners and not enough losers if EGTRRA is allowed to sunset. Let’s examine the players in this, and see just what it is they have on the line:
Democrats – Increased revenues may help offset continued increasing budget deficits.
Republicans : Campaigning for a repeal of the estate tax continues to be an effective fundraising issue. A permanent resolution of the estate tax issue would “kill the Golden Goose.”
Insurance Companies – Use of ILITs funded by life insurance policies will again become a favorite estate planning tool to pay for the estate tax and preserve the estate.
Charities – estate tax motivated charitable planning will again become popular.
As for the States, they are counting on the return of the estater tax to boost dwindling revenues.
Losers, should the estate tax return: Those with a vested interest in seeing a permanent end to to the estate tax are the heirs of those people who have failed to plan.
The political posturing of the estate tax issue has changed from the early Bush years of calls to repeal the “unfair and unjust death tax” to “not giving a tax break to the very wealthy.” It is unlikely that we will see bipartisan political agreement on any meaningful long-term “estate tax reform” in the near future.
What this means to you is continued uncertainty about the pending return of the estate tax. For those people lucky enough to live in South Florida, the estate planning attorneys of Wild Felice & Pardo can effectively create an estate plan that will protect your beneficiaries from any possible estate tax and make certain to avoid probate entirely.
Michael D. Wild is a Florida attorney specializing in the areas of estate planning and asset protection. For more information on successful Florida estate planning and asset protection techniques, please contact the South Florida law firm of Wild Felice & Pardo, P.A. at 954-944-2855 or via email at info@wfplaw.com to schedule your free consultation. Protecting what you value most.