2009 Tax Changes that May Affect Your Estate Plan
The Estate Tax Exemption, the amount of money that you can pass to your heirs without triggering estate taxes, has increased from $2 Million to $3.5 Million. Current law provides for a total repeal of the estate tax in 2010, and then a return to the $1 Million exemption in 2011.  We don’t know how this will change over the coming years, but the expectation is that Obama’s administration will keep the exemption at $3.5 Million levels.Â
If your estate is less than $3.5 Million, you probably won’t have to worry about estate tax planning. If it is larger though, you should meet with an estate planning attorney to figure out your options for reducing your estate tax hit, which would tax any amounts over $3.5 Million at 45%.
The gift tax exclusion has increased this year to $13,000.00. You can now make annual gifts of up to $13,000 per recipient without incurring gift tax.
 If you haven’t had your estate plan reviewed in a few years, it may be a good time to set up an appointment with your attorney to go over your plan and discuss any changes that may be needed as tax laws change.Â
Annual Gift Tax Exclusion Rises to $13,000 for 2009
If you use tax-free annual gifts as part of your estate tax planning, please note that the maximum for 2009 annual gifts has increased from $12,000 per person per donee to $13,000 per person per donee. This increases the amount you can gift without incurring gift tax or having to file a gift tax return.
Possible Effects of Obama’s Presidency on Your Finances
Mike Patton, a fnacial planning professional with the firm of Integrity Wealth Management, LLC, has posted the following article where he summarizes some of the changes we may see with the new administration.
http://integritywealth.us/obama_presidency.pdf
Use the link above to download the article, which addresses potential changes to the estate tax and income tax rules that may be made by Obama’s administration. Only time will tell if any of these proposals come to fruition. But now more than ever it is a good time to make sure your own financial plan is in place, so that you can maximize any opportunities to build and protect your wealth.
Planning for 2010
Planning for 2010, the year when there is no estate tax, raises some interesting moral, legal, and ethical issues.
http://estateplanningblog.blogspot.com/2008/03/planning-for-2010.html
In this post, my colleague Henna Shaw explores the opportunities and the dilemmas raised by the prospect of no estate tax in 2010. See her article for an interesting discussion of the issues.
Estate Planning is Not Just About Money…
This article in the NY Times (click here to view) points out that for many families, estate planning is more about family issues than tax issues.
Increasingly, wealthy families are designing estate plans to pass values of philanthropy and work onto their children, using charitable planning to split the benefits of the estate between the kids and worthy charities. This avoids “trust-fund baby” syndrome, and provides your children with incentives to become independent.
If you are intersted in thoughtful wealth transfer strategies that leave your children values as well as money, contact my office and schedule a consultation on values-based estate planning strategies for large estates.