Due to Congress’ failure to act before the end of 2009, the current estate tax system is in a state of uncertainty.
Unless Congress acts this year, there will be no federal estate tax for people who die in 2010, regardless of the size of their estate and in 2011, the estate tax will return with a $1 million exclusion per person and a top tax rate of 55%.
Because no one can be certain what to expect from Congress this year and because President Obama’s proposed 2011 budget is vague regarding estate taxes, we are left with even more uncertainty. Even the experts don’t all agree with what’s likely to happen this year.
However, no matter what develops, now is still a good time to put an estate plan in place if you have not done so, or to review the one you have. If you have an estate plan in place, here are only some of the issues you should review with your estate planning attorney:
· Review the original purpose of your plan, making any necessary changes.
· Update your documents if you have had any significant changes to your health, family dynamic, or estate size.
· Review gifting strategies since there have been major changes in the gift tax system as well.
· Make sure the life insurance policy that is a part of your estate plan still fits your needs.
· Review cost, type of coverage, amount of coverage, owner and beneficiary provisions and performance of that policy.
· Make sure that the coverage you now have will last as long as you want it to.
· If you have an old policy that is no longer needed, consider cashing it in for its surrender value or exploring the secondary market to sell it.
Whatever you decide to do in the review process, the important thing is to take action. A little time spent making sure the key components that are in place will save your family time, money, and hassle sorting out the details when you die.
If you would like help in reviewing your estate plan, Brown and Brown has life insurance and estate planning professionals who can assist you. We will coordinate the review process with your key advisors and/or make recommendations for competent counsel, if needed. We will be a part of the overall team who helps guide you through this uncertain time.
By Marc Labadie, CLU
Brown & Brown of Detroit