This year, 2010, saw the repeal of the United States Estate Tax. But Alas! It was short lived.

Yes, as expressly set forth in that law which repealed the ominous Estate Tax (otherwise known as the “Death Tax”), that repeal was just temporary! If Congress didn’t make it a permanent repeal, then the tax would be automatically reimposed in the year 2011.

Guess what. Congress did not make the Estate Tax repeal a permanent repeal. They need your money. You see how extravagent and profligate Congress is in spending their constituents money. I can’t count the zeroes in the new national debt.

In any event the Estate Tax is reintroduced as of January 1, 2011. Yes, that’s just next year. But not to worry. The Estate Tax is a tax on only the very wealty. But contrary to popular opinion, many Americans will now find themselves eligible for this tax.

In 2011 the Estate Tax exemption amount will be a whopping big $1million. That means only estates worth more than One Million Dollars will be subject to the Tax. So, you see, it’s only for the wealthy to worry about. Unless you’re a cash strapped farmer, or small business owner, with a nice net worth. In those cases the families of the deceased may have to hold “fire sales” to raise enough money to pay the Tax.

Uncle Sam doesn’t accept intangible such as stock, or even tangibles like farmland, to pay the tax. And it must be paid within nine months of the death. This can, and often does cause great stress and consternation.

Why is something taxed at death, when it has all been taxed while being earned? Doesn’t that amount to double taxation? In the wisdom of Congress it’s just a small tax on those who can afford it.

A small tax? The maximum tax rate is increased by this un-repeal to a whopping fifty-five percent (55%). Yes, that’s more than half the total estate.

If you find yourself in that category of the wealthy who can afford this tax, do you need to do some planning?  Would you rather pay this tax with whole dollars or at a discounted rate? Most of my clients prefer a discounted rate instead of a payment of the whole dollar amount. How can you do that?

You can choose to pay the tax with discounted dollars. It’s now easy with the use of Life Insurance. But it takes some serious planning.

Without the right planning your life insurance death benefit payment may also be subject to that same fifty-five percent death tax. An experienced estate planning attorney can help you with the details. This is when an experienced person can be worth is fee in gold.

It’s true. Everybody has a Last Will and Testament. Everybody. The question is: Was your Last Will and Testament prepared by you, or was it prepared by your State Legislature?

You see, if you haven’t drafted your own will, then yours will be the one designed by your State’s law. It’ll be the one prepared by the legislature in the State where you resided at the time of death. Such laws are referred to as intestate laws. One who dies without a will, dies intestate.

The intestate laws generally require that the decedent’s assets be distributed to their next of kin. Heirs may receive a share of an intestate estate after they have reached the age of 18. The closest relative will be chosen to administer the estate and pay the bills and make the final distributions.

So if you want any say in how your estate will be handled and distributed you must make your own Last Will and Testament.

Start by making a list of your assets and estimating their value. Then decide on your objectives: Do you wish to avoid probate, to reduce the cost of settling your estate, to minimize your estate taxes, to make specific bequests, or name a guardian? What are some of the other things you want to consider?

Then prepare a will, or a living trust, to meet your objectives with your assets. Consider what help you will need in preparing your will or trust. Ask the right questions. Then get it done. Don’t put it off–even if you don’t think it’s urgent. You’ll feel pleased about what you have done.

“The only thing constant in life is change.” -Francois de La Rochefoucauld (1613-1680), a noted French writer and author of Maxims. He was also described as being “gently cynical,” and also said: “Everything is reducible to the motive of self-interest.”

Change happens so often, how do I know if or when it’s time to change some legal documents such as a Last Will and Testament, or a Revocable Living Trust? Here are some things that denote changes in your life. These events should remind you to review and perhaps change your Will (with the motive of self-interest):

1. If there has been a new child born to your family.

2. If there has been a divorce.

3. If there has been a marriage.

4. If there has been a death in the family.

5. If the value of your assets has fluctuated up or down more than $50,000.

6. If there has been an inheritance.

7. If there has been a significant change in your relationship with your heirs or beneficiaries.

8. If there has been a significant change in your medical condition.

9. If your feelings towards family or friends has changed.

10. If there has been a change in the types of assets you own.

11. If you haven’t look at your will or trust for more than eighteen months.

12. If there has been a change in the law (including tax law) which could affect things.

13. If you have received a notice from your lawyer that something should be reviewed.

AND just anytime you feel like it! It’s in your self-interest.

The estate tax is repealed for 2010. There is no estate tax if you die in the year 2010–at least currently.

There are bills circulating in Congress to revive the estate tax, even for this year. Some would like to even roll back the estate tax exemption amount to $1 million, and make this retro-active to the beginning of this year. This, of course, means if successful, a tax would be imposed on estates worth more than $1 million, even on those who die in the year 2010.

If you are in a situation where a spouse died in 2009 ir 2010, and your total estate is worth more than $1million, you may want to take advantage of the use of a marital deduction trust. Such a trust helps you double the exemption amount on your estate.

Just today I met with a client whose spouse died in 2009. Their total estate was just over $3 million. If the surviving wife were to die this year there would be no estate tax under the current law.

However, when we considered the possibility of a roll back in estate tax exemptions for 2010, and if the wife were to die, there could be an estate tax due of more than $1 million. So we considered it prudent to take advantage of the marital deduction trust provisions and avoid this possibility.

The family considered this a cheap insurance policy against any possible change in the law. Right now, the law in this area is uncertain.

So, ask yourself, What is your current situation?

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