Estate Tax Contingency Planning Critical in 2010
Contingency planning for estate taxes has never been more critical than it is this year. Why?
The federal estate tax expired on Jan. 1, 2010. In addition, a long-standing provision that "stepped up" the basis of someone's assets to their market value at his or her death (which allowed them to be sold immediately with no capital gains taxes), also lapsed in 2010. The federal estate tax will come back to life on Jan. 1, 2011.
Do you know how this will end? If so, forget about the contingency planning. If not, then you need to consult with your estate planning attorney to ensure your estate plan has taken into consideration a year with no estate tax as well as the minimum $1 million exemption for 2011.
If you are married, chances are your estate plan has been designed to use each spouse’s estate tax exemption; when one spouse dies, the amount of the exemption goes to a “bypass trust” for other heirs and the rest goes to the surviving spouse. But with no estate tax in place, this plan doesn’t work.
Some states have passed laws addressing this, but Florida decided to require the heirs to go to court to sort it out. Consulting with a Florida estate planning attorney can help you bypass this requirement.
For more information on retirement and estate planning, contact our Jacksonville Florida estate planning law firm.
