• 20
  • October
    2011

For anyone trying to make an estate plan in the last few years, there has been a lot of uncertainty around the estate tax. Just last year, the estate tax fell to zero. This year, an estate tax was reestablished. For 2013, the estate tax is likely to be raised again.

There are measures that can be taken to reduce the unexpected negative consequences of changing estate tax rates. Estate planning attorneys are adept at anticipating the potential changes and how they would affect the distribution of an estate according to the deceased's wishes.

Florida estate planning lawyers often advise clients to consider these basics of estate planning:

Gifts: When people give gifts during their lifetime, they reduce the amount of their estate, and thus reduce the amount of estate tax. Gift tax rates may change in the future, but for now couples can give $10 million in gifts without incurring any gift tax. Gifts are among the simplest and yet most overlooked estate planning tools available.

Power of Attorney (Financial): It is important to plan for one's own death, but it is also important to plan for becoming incapacitated. A will is not much help to a person who is alive but unable to make decisions about their own finances and other important matters. A power of attorney gives a trusted person or institution the ability to make decisions for a person who is incapacitated.

Power of Attorney (Medical): It may well be that the person selected for a financial power is not suitable for making personal medical decisions for an incapacitated person (and vice versa). It is common for medical and financial powers of attorney to operate separately, and have different persons appointed to make the respective decisions.

Trusts and Wills: There should be a plan in place for passing the estate once a person dies. In many cases, it will be advisable to have a trust (or multiple trusts) and a will. This may seem like overkill, but it is not. A little extra planning now will make things easier for the heirs, pass the estate according to the deceased's wishes, and avoid emotional and legal conflicts later on.

Source: AARP "A To-Do List for Estate Planning" Oct. 19, 2011