The current $5,120,000 Federal estate tax exemption goes back to $1,000,000 with a top marginal estate tax rate of 55% on January 1, 2013 if lawmakers don't take action. This is big news because if your taxable estate exceeds $1,000,000 then you could end up having to pay over half of everything left over (after taking into account the exemption) to the Government. Click here for a good article by Forbes on the subject.
There are ways to avoid these kinds of tax consequences that you can take advantage of over the next few weeks, but you should plan ahead to ensure you don't miss out. Some of the strategies that may be available to assist with avoiding unnecessary estate taxation involve tools such as: gifting to trusts, life insurance trusts, family limited liability entities, and credit shelter trusts. The question that remains unresolved is whether or not many of the current strategies available will continue to be effective in the future. Some of the proposals on the table suggest curbing the benefits of certain strategies. This is why you are seeing a call to review your plans now.
If you would like to discuss whether or not these tools or others are appropriate given your circumstances, contact us as soon as possible to set a complementary consultation. Don't wait until it is too late! You can get our contact information on our website here.