1. How Can You Take Advantage of 2010 Tax Law Changes?
The 2010 Tax Relief Act is complex, temporary and full of opportunity.
Below are five things you should consider before time runs out:
1. Did the tax legislation upend my estate plan?
Most estate planning documents have formula clauses in place which determine where your assets will go.
Given the increase in exemption amounts, your estate plan may not benefit your family members in the way
you intended.
2. Am I taking full advantage of the new exemption amounts?
The $5 million ($10 million for married couples) gift, estate and GST exemption provides an unprecedented
opportunity for lifetime giving, particularly for grandchildren. Even those who exhausted exemption amounts in
prior years now have additional exemptions to use for lifetime transfers.
3. Am I using the best vehicles to maximize gifting?
There are some tax-advantaged techniques that leverage your exemption amounts. Consider estate planning
strategies such as grantor-retained annuity trusts, dynasty trusts, intentionally defective grantor trusts or
charitable lead trusts.
4. If I have an estate below $5/$10 million do I even need to worry about planning?
Planning is important for estates of all sizes due to issues such as disability, family dynamics and business
interests. Also, many states have estate tax exemption amounts below the $5 million federal estate tax level
which could result in the imposition of state estate or inheritance taxes. If you reside in one of those states,
careful estate planning is required to navigate the different exemptions and reduce overall taxes to the lowest
possible level.
5. What does portability mean for me?
Portability allows a surviving spouse to utilize unused estate tax exemption amounts of a spouse who dies in
2011-2012. However you can’t rely on this transferability after 2012 and it only applies to estate and not
generation skipping tax exemptions.
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