The Estate Tax, What a Mess

This blog entry will be brief, but I did want to discuss the ever popular subject among estate planners....the estate tax.  This article from Forbes, linked here: http://www.forbes.com/2010/04/18/estate-tax-sharp-bite-2011-personal-finance-grats-flps.html discusses the estate tax possibilities going forward in 2011.  What was even more surprising is the speculation that some of the vehicles used to minimize this tax may come under increased scrutiny as well, including Family Limited Partnerships and Grantor Retained Annuity Trusts.  Most estate planners and financial advisors I speak with call this a "moving target."  And that is exactly what it is. 

If the annual exclusion is lowered to $1 million, then the estate tax won't just be something that the wealthy have to worry about.  There will be many middle-class to upper-middle class families will be subject to it.  Between investment brokerage accounts, retirement accounts, assets (most importantly your primary residence), and bank deposits, the size of an estate for many American families can easily approach $1 million.  With the current political climate in America and the need for Congress to find new sources of revenue to finance new federal spending, it is safe to assume that the estate planners will be busy for some time to come. 

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