Estate Planning and Philanthropy
Estate Planning | Current Trends
According to the Internal Revenue Service, between 2002 and 2010 estate and gift
tax rates in the U.S. have been among the lowest in U.S. history. Moreover, estate
and gift tax exemptions in the U.S. have been among the highest in U.S. history.
While there have been several proposals put forward by ranking members of Congress
in the last few years to extend existing estate and gift tax rates and exemptions,
they have all been ignored as a result of the recent U.S. federal and state fiscal
crises brought on by a combination of the global financial crisis, financially troubled
social insurance programs, expenditures on the wars in Afghanistan and Iraq, and
the servicing of existing U.S. federal debt obligations. As a result of the lack
of attention towards estate legislation, estate taxes and gift taxes pose the greatest
threat to wealth preservation.
On December 31st, 2010 the tax cuts and incentives enacted during the previous white
house administration are set to sunset. Unless Congress acts otherwise, U.S. estate
and gift tax rates are set to revert to their substantially higher 2000 levels in
2011. Additionally, the estate tax exemption is set to revert to its substantially
lower 2000 level of $1,000,000 in 2011. Consequently, as a result of these changes,
high net worth individuals that pass away in 2011 and beyond may be taxed at the
new 55% highest federal estate and gift tax brackets if their assets exceed the
$1,000,000 exemption. Moreover, state specific inheritance and estate taxes, and
probate expenses will continue to apply.
By engaging in our estate planning service, high net worth individuals may reduce,
defer, or eliminate their anticipated estate tax liability and other estate settlement
costs.