Estate Plan

Flexible Estate Plan Needed
to beat US Congress

So, what kind of estate plan do you need?

Now, more than ever, your estate plan needs to be flexible.


  1. Continue your planning under current laws - that is, estate tax exists and there are exemption amounts.

    There are tools and techniques to help reduce what is included in your estate and subject to tax and to ensure maximum exemptions are available and used.

  2. Ensuring you have a Will continues to be a cornerstone of good planning. It is the tool that stipulates how your assets should be distributed and who will be the legal guardian of your minor children and others in your care.
  3. For your family and family business, ensure that you have a Succession Plan. The shareholder Agreement or Buy / Sell Agreement are also principal tools that keep your estate plan flexible.
  4. Life insurance is a prime source of funding both for your survivors' needs and to facilitate family business succession. Good planning will ensure that it does not get included in the taxable portion of your estate.

    Note, however, that the family business itself is an alternate source of funding so the planning does not always seek to maximize business value and therefore insurance required to fund the transfer... Exit Planning explores other approaches that might be appropriate for you.

  5. Do you have questions about your organization?
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  6. The law and estate planning environment will change in the next several years, so you should plan to review your estate plan again in 3-4 years. Congress has been trying to change the law ahead of the 2010 "sunset" deadline.

    While the extremes of "do nothing" [estate tax stays; exemption amount goes back to $1 million] OR "full repeal of estate tax" are possible...

    a likely scenario is a compromise - retain estate tax, but adjust the tax rate and /or exemption amount.

    Therefore, a flexible estate plan will:

    • focus on language and provisions to maximize what can pass free of estate tax, using tools like insurance trusts and charitable remainder trusts;
    • maximize use of the estate tax exemption, for example with revocable living trusts;
    • maintain insurance coverages that have been necessary under the present tax system. If and when the estate tax is repealed or the tax burden is reduced by lower tax rates or increased exemptions, you can let the insurance lapse or consider converting it to whole life or some other coverage.
    • Always maintain a valid and up-to-date Will, even if estate tax is fully repealed.





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