Should Auld Estate Taxes Be Forgot And Never Brought To Mind?

Just while most of us Americans were fairly laser-focused on final holiday preparations and planning, shopping and cooking, just before school vacations and family visits commenced, Congress passed and President Obama signed “The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010” (or NAMBLA, Seriously, could no one devise a better name? Let’s just call it the “2010 Act” here, OK?).  So where do we go from here?  What do the estate planning pieces of this new law mean for you? 
Despite some excitable commentary you may have overheard, the 2010 Act does not obviate the need for estate planning for most of us.  Yes, it’s true that now we are all free to leave $5 million to our loved ones without paying any federal estate taxes on it and we can even combine exemptions with our spouses to get to $10 million to leave our kids without even having to jump through alphabetical hoops (those A/B trusts)!  Fantastic, but most of us do not begin the process of planning for our own incapacity and eventual deaths and our children’s futures (i.e. estate planning) with avoidance of federal estate taxes as our primary motivating factor.  At least that’s true for almost if not all of my clients, none of whom are billionaires yet, though I would venture to guess that billionaires have other primary motivations too.  
Here are some things the 2010 Act does not do, things you still need to do both for yourself during your lifetime and especially for your surviving loved ones after you are gone: 
  1. legally appoint guardians for your minor children (without making some of the most common mistakes even loving parents make that could leave their children legally and financially vulnerable – sign up over there on the left or via this link here to learn more in easy bite-sized pieces) 
  2. legally appoint the people you want to express your wishes, speak on your behalf, and make medical decisions for you in the event of your incapacity to do so yourself during your lifetime and even after your death (BTW, did anyone else see that “Marionette” episode of Fringe!?! I won’t spoil it here.)
  3. legally empower someone you trust implicitly to become familiar with and manage any or all of your financial affairs if you should ever be unavailable or become unable to do so during your lifetime
  4. legally designate the specific people to whom you want to leave whatever you may have whenever you die, when and how and for what purposes you want them to receive it
  5. legally designate the person you want to be responsible for wrapping up all your final affairs and overseeing the sale or distribution of everything you own at your death to the people you’ve designated to receive it
  6. defer (until after the surviving spouse in a couple dies), reduce, or eliminate Massachusetts state estate taxes – that exemption amount remains at $1 million, which may sounds like a lot but talk with your estate planning attorney about whether you may have a taxable estate, you may be surprised at what you learn

Unless you are single or in a heterosexual legal marriage, own few worldly possessions, have few assets, and do not have minor children, I strongly advise you to at least talk with a lawyer who practices in the field of estate planning before you attempt any online or form Wills and other estate planning documents to avoid the often tragic and unnecessary unintended consequences we too often see.  The most recent high profile example that comes to my mind is Steig Larsson, author of The Girl With The Dragon Tattoo and its sequels.

About Danielle G. Van Ess

Danielle G. Van Ess is a Massachusetts (born and raised), experienced estate planning and small business attorney who helps her clients protect and preserve what matters most to them. To learn more, please visit: dgvelaw.com or call: 781-740-0848

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