Wednesday, October 19, 2011

When is the Best Time to Plan Your Estate?

The estate tax laws of the past few years have been so inconsistent that many people are still “waiting for things to even out” before they create (or update) an estate plan. This wait-and-see approach seems perfectly reasonable on the surface; after all, nobody wants to spend hard-earned money creating an estate plan only to have it rendered obsolete within a year. Our firm is here to let you know that there’s bad news and there’s good news...

The bad news is that estate tax law doesn’t appear to be settling down any time soon. We all know the estate tax was repealed in 2010, and then reinstated in 2011. And now, as this article from AARP mentions, “federal estate tax rates are slated to change again in 2013, unless Congress decides otherwise.” Furthermore, there are quite a few other mercurial tax laws that have a significant impact on estate planning, including the capital gains tax and the gift tax, to name just two. Both of these factors mean that the future of estate planning is still cloudy.

The good news is that even with all this uncertainty, an estate planner can help you plan for just about any situation. There is much more to an estate plan than just tax planning, including providing for your loved ones, planning a smooth financial transition for your spouse and children, ensuring you’ve nominated the best people to make medical and financial decisions if you become incapacitated, and much more. All of these are foundational elements, and don’t have to change if and when the tax laws do. Making the right plans now means you may have to make only a few small tweaks when 2013 rolls around.

The one thing you can be certain of is that life rarely plays out the way we expect. It’s better to make solid plans now that may change a few years down the line, than to wait unprepared and unprotected for tragedy to strike. Our office can help you build an estate plan that can weather whatever the future may bring.