To be optimally positioned at all times you must assume that your estate plan will need adjustments over the years. Some things take place that are out of your control and can interfere with your existing estate plan, and such an event is taking place at the end of this year.
The estate tax rules that are in place right now are a result of provisions contained within the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010. This act is going to expire at the end of 2012 and when it does the estate tax exclusion will no longer be portable.
“Portability” in this context is the ability of a surviving spouse to utilize the estate tax exclusion that his or her deceased spouse was entitled to as well as his or her own individual exemption. Right now the estate tax exclusion is $5.12 million per person, so if you were a widow or widower you would have double that amount to pass to your heirs without estate tax for the rest of this year.
But in 2013 the portability vanishes and in fact the individual exclusion goes down to just $1 million, so we are talking about an enormous difference.
Estate plan reviews are always a good idea, but such a review is absolutely essential this year given the coming changes. To discuss the impact that these changes may have on your existing plan with an expert take action right now to arrange for a consultation with an experienced Ashland KY estate planning lawyer.