Planning and Review Necessary to Transition from 2010 to 2011-2012 Estate Tax Structure
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Planning and Review Necessary to Transition from 2010 to 2011-2012 Estate Tax Structure

Missouri City : TX : USA | Mar 23, 2011 at 1:00 AM PDT
Source: PRWeb
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Louis, Missouri estate planning attorney, explains what can be learned from looking back on 2010 and how to move forward in 2011-2012. March 23, 2011 2010 was a very odd year for estate taxes: The much-celebrated repeal ended up being potentially more expensive for many middle class families, the possibility of a retroactive tax in 2010 kept many estates on hold, and the inability of lawmakers to pass legislation until the 11th hour left many taxpayers full of doubt and uncertainty. Even now, the new rules are scheduled to sunset in 2012, when we may have to go through all of this again. But, according to estate planning attorney Steven Spewak, the worst thing you can do is stick your head in the sand and hope it all works out. According to Spewak if you don't create an estate plan, the IRS and the state of Missouri will simply make one for you. And, to put it delicately, the government is not exactly focused on minimizing taxes or looking out for the best interests of you and your loved ones. Here is what you can learn from 2010, and how to move forward in 2011: New Estate Tax Exemptions and Rates: 2009 estate tax exemption was $3,500,000 with amounts over the exemption taxed at 45%, and in 2010 the tax was repealed altogether...The 2011-2012 rules set the estate tax exemption at $5 million per individual ($10 million per married couple), with amounts over the exemption taxed at a 35% rate. If you aren't sure your plan takes the new rules into consideration you'll want to place a call to your estate planner. Tax Election Option for 2010 Estates: This is one of the most important aspects of the new rules. There may have been no estate tax in 2010, but there was also no step up in basis, meaning that heirs selling inherited assets were taxed based on the original acquisition cost of the assets, not on their value as of the date of the taxpayer's death, as is usually the case. This led to a higher tax paid on the assets if and when they were sold, in spite of the lack of estate tax. Tax election option now gives 2010 estates the choice of whether to use 2010 or 2011 tax rulesa very happy option for 2010 heirs. Unification of Estate, Gift, and Generation-Skipping Taxes in 2011: In previous years these three levies have had varying exemption levels, making gift giving and succession planning a challenging exercise at best. The unification of all three makes tax planning and giving gifts to children and grandchildren much easier than it used to be...Unfortunately, the new rules are only effective through 2012, at which point the provisions will sunset...Rather than being caught off-guard, plan ahead with your advisors to ensure that you're prepared. Build flexibility into your plan, and schedule reviews at regular intervals...Failure to create, update, or fund your estate plan can lead to lengthy and expensive probate proceedings at best, and family feuds and court battles at worstand this applies whether or not there have been recent changes to tax rules. The upheaval of 2010 and the new laws of 2011 provide the perfect opportunity to create a plan (or update your existing plan), and ensure that your family will be well protected now, and in the future. Steven Spewak has practiced as an estate planning lawyer in the metropolitan St...He is a co-author of the authoritative book on estate planning, Love, Money, Control; Reinventing Estate Planning, published by Quantum Press, and a contributing author to the recently released book, Estate Planning Strategies, published by Wealth Builders Press, LLC...Steven Spewak 314-542-2210 ### Contact Steven Spewak 314-542-2210

 
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