The Prospective Plan-The Estate Tax is Here to Stay

President Obama's plans are not absolutely clear now but he does intend to ask Congress to change the law repealing the estate tax in 2011 (along with other tax cuts) or allow it to "sunset". This requires aggressive estate tax planning for many people with larger estates. It is not clear yet how large of an estate will not be subject to estate tax. The President has said he may keep it to 2.5 million or 3.5 million. But, this will be up to Congress and the President to negotiate. What is clear is that experts now believe that the estate tax will be here to stay and we must plan for it.


Plan for the Worst

I have advised my clients to plan as though the estate tax will stay even though current law repeals it in the future. This is because the law sunsets without Congressional action. I generally advise married clients with estates in the 3 million dollar range (and sometimes even less) to do a typical credit shelter trust. Even though the estate is less than a typical estate subject to estate taxation, this estate would be subject to Oregon inheritance taxes. Also, we do not know what Congress has in store in the future as far as lowering the threshold. This is not an extremely expensive trust to do and is easy to manage. There are other additional options for larger estates.


Be Diligent--Watch the News

I advise my clients to be diligent and pay attention to what is going on in the news. I keep my clients informed of major legal changes that require changes to their trusts. However, the client is ultimately at his/her best when he/she is best informed.


Keep Everybody in the Loop and Use Competent Professionals

Estate Planning is a team effort requiring you, your CPA and your lawyer. All of us need to be on the same page. I work with everybody with the idea of maximizing your estate planning goals while minimizing your tax liabilities within the confines of the law. There are lots of options available. There are also a great deal of "urban legends" in this area. You must trust the legal advice of competent professionals.