Thursday, December 2, 2010

2010 is ending...What to do?

The end of 2010 marks the end of the great no estate tax windfall. From "the boss" of the New York Yankees to one of Texas' richest energy barons, those "lucky" enough to die this year were able to protect their fortunes from Uncle Sam's "death tax."

The estate tax returns on January 1, 2011 with a vengeance. The $3.5 million exemption and 45% rate that was in place in 2009 will return to the 2001 levels of $1 million (indexed for inflation) and 55% when EGTRRA sunsets on the coming New Years Eve.

This is complicated, so what does it mean for you?

At year end, its always a good time to revisit your finances and planning, and 2010 offers further incentive. You may have never had to worry about paying an estate tax, but the lower levels will now affect a much high number of families than before, especially small business or land owners. Even if you do not have $1 million in assets, its time for a year end checklist:

Do you have a will?

If you do have a will, when was the last time you reviewed it?

Have your goals, finances, family structure, or business changed?

If you make charitable donations of any form, are you getting the appropriate tax deductions?

Do you have a medical power of attorney, in the event you were injured and could not make decisions for yourself?

If you support family members or others, have you taken advantage of advantageous taxable gifting regimes expiring at year end?

If you have elderly relatives or friends, are they receiving competent healthcare, and are they taking advantage of government benefits?

Many of these questions have simple, inexpensive answers that can lead to significant savings and headache prevention in the future. Its never to early to plan for tomorrow, and the end of the year is a great time to reflect, regroup, and reorganize.

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