Estate and Gift Planning

The purposes of estate planning are to decide

1)  the fair disposition of possession and ownership of property,
2)  how the survivors will be provided for,
3)  how to structure the QTIP election of Massachusetts purposes,
4)  if the estate will be liquid enough to pay debts, expenses, and taxes
5)  what the impact of taxes will be,
6)  how can taxes be minimized and/or deferred,
7)  whether to gamble on estate tax repeal before 2011,
8)  whether life insurance is needed and in what amount,
9)  should the insurance be owned in a trust,
10)  if a dynasty trust makes sense,
11)  If a foreign trust makes sense,
12)  does a generation skipping trust make sense,
13)  who will own and operate the business,
14)  how will the value of the business be preserved,
15)  whether to have a buy-sell agreement,
16)  does a family limited partnership make sense,
17)  how will minor children be taken care of,
18)  how will children of the second marriage to taken care of,
19)  the correct way to cut heirs out of the will,
20)  how will lifetime gifts fit the situation,
21)  whether to use educational/medical exemption,
22)  how to provide for expenses of death,
23)  whether to minimize probate,
24)  how much to give to charitable causes,
25)  how to deal with nontraditional relationships,
26)  whether a new will is required,
27)  whether a living trust should be used,
28)  should ownership of property be changed,
29)  the advantages and disadvantages of joint ownership,
30)  should IRA accounts be split,
31)  should IRA accounts be converted to ROTH IRAs,
32)  should life insurance be purchased to cover the taxes on IRAs,
33)  should beneficiary designations be changed or updated,
34)  how to achieve privacy,
35)  how to speed up the process, and
36)  numerous other considerations.

The Economic Growth and Tax Relief Reconciliation Act of 2001 provided increased estate tax exemptions, a stable de-coupled gift tax exemption, replaced the state death tax credit with a state tax deduction, reduced marginal rates to as low as 45% for deaths in 2007-2009, no estate and generation-skipping tax in 2010, and a return to the $1 million exemption in 2011 and a top marginal rate of 55%. Like the alternative minimum tax reform attempts by Congress, estate tax reform has gone nowhere. It is not a good idea to gamble that a polarized do-nothing Congress will eliminate the estate tax.

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