Annual Gift Tax Exclusion Now $13,000

• The law will arbitrarily decide who gets your assets, regardless of your actual wishes and if you made those wishes known to anyone.
• The court, in a potentially lengthy and sometimes more expensive process, will decide who is entrusted to administer your estate (again, regardless of what your wishes may have been).
• The person who is selected to administer your estate will lack certain powers that your will could easily have provided htem.
• Intestacy often means uncertainty, especially for your loved ones.

For my own part, I am writing my will:

• …to make sure that particular assets of mine go to those who will properly appreciate them.
• …to designate an executor of my estate so the court doesn’t designate somebody who I don’t trust with this job.
• …to make sure my executor can start his or her job as soon as my will is admitted to probate (without a special provision in a will for this, the process can take weeks longer before the executor can begin his or her job).
• …to grant my executor certain powers so he or she can do what is necessary to settle my estate — without having to run to the court, hat in hand, to get permission.
• …to provide certainty for my loved ones.

It is a good idea to have an attorney review your estate plan whenever you have new developments in your life, such as:

• Marriage
• Divorce
• Birth of a child or grandchild
• Death of spouse, child, or parent
• Death of someone named in your current will
• Being diagnosed with a potentially terminal illness
• Coming into a windfall of money/assets (such as an inheritance, a prize, gambling winngs, etc.)
• You or your family taking on substantial debt
• Giving someone a substantial gift
• Taking on a new job that pays a great deal more
• Owning real estate
• Owning a business
• Owning a pet or other animal

The above is not an exhaustive list, but should give you some clue as to when an estate plan is due for a review. Additionally, anyone with a net worth in excess of $2 million has no excuse to not have an updated estate plan in place.

Additionally, it is a good idea to have an attorney review your estate plan about every two to five years. If it has been more than two years since your most recent estate plan review, strongly consider contacting an attorney who can meet your estate planning needs today.

MORE NEW YEAR NEWS

Now that we’re well into 2009, it’s important for clients and potential clients to realize how new tax laws impact their estate plans.

For starters, the annual gift tax exclusion has been increased to $13,000. The obvious implication of this is that an individual can now give up to $13,000 per donee per year tax-free. Additonally, these gifts can be split with one’s spouse – with the spouse’s consent – for a maximum of $26,000. Indeed, some married couples make their annual gifts as early in the calendar year as possible – to ensure that both spouses are alive at the time of the gifts (after all, a deceased spouse cannot consent).

Because of this, 2009 is a great time to review your trust plan and/or giving program (especially if it has been more than two years since your most recent estate plan review), so as to continue to maximize the use of lifetime gifting strategies. Additionally, all good trust plans, giving programs, and estate plans afford some degree of flexibility – not only to account for a client’s changing plans, priorities, and life developments, but also changes to applicable laws. Contact an attorney for your estate planning needs today.

- Joe Stanganelli, Esq.