5 Estate-Planning Tasks That You Shouldn’t Put Off

By Christine Benz


The estate tax might be in flux, but that doesn’t mean you should throw these important to-dos on the back burner.

Keeping tabs on the estate-planning rules during the past few years has been a little like watching Olympic-level table tennis: The action moves quickly, and it’s difficult to keep up.

The amount of assets that could pass estate-tax-free drifted upward for most of the 2000s, and the estate tax went away altogether in a single year, 2010. Extremely generous exclusion amounts, which allow estates of more than $5 million to escape the estate tax, have prevailed for 2011 and 2012. But the tax is set to return with a vengeance in 2013. Barring Congressional action, estates of $1 million will be subject to the estate tax starting next year, and the top estate tax rate will be 55%.

Contemplating your own mortality or incapacitation, as estate planning requires you to do, is off-putting under the best of circumstances. And the constant flux in the tax code no doubt makes estate planning even easier to put on the back burner. After all, setting up an estate plan can be costly, and many people, especially younger folks, probably worry that they’ll fork over a lot of money only to have to revise the plan when the laws change again.

But even if the amount of assets subject to the estate tax increases above the $1 million level that’s planned for 2013, I’d still take the threat of higher estate taxes as a wake-up call. The exclusion limit has been extraordinarily benign for the past three years, affecting only very wealthy families, but it might not remain that way. When you consider that real estate holdings are included in one’s total estate value, it’s not hard to see how reducing the exclusion amount to $1 million or less could touch a lot more families. Even if the exclusion amount remains very high, the core estate-planning to-dos are actually pretty evergreen and don’t have anything to do with the tax regime. They could, however, have an extraordinary impact on whether your wishes are carried out before and after you die.

If interested in discussing LGBT estate planning/asset protection, you can contact Laura Bianchi, Chair of RLG’s Estate Planning/Asset Protection Department, at lbianchi@roselawgroup.com


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August 2012