As many of of our clients are already aware, President Obama signed into law the 2010 Tax Relief Act, which extended the tax cuts enacted under President Bush’s administration. This legislation restored the estate tax for 2011 and 2012 at a 35 percent tax rate for estates that are valued over $5 million.  Estates valued at $5 million or less are exempt from paying any federal estate tax.  (The amount exempt for couples is $10 million or less.)  The new law also sets the estate, gifts and generation-skipping transfer tax exemptions at $5 million, with a 35% tax rate applying to gifts and transfers over $5 million. 

Even with the new exemption amount of $5 million pertaining to federal estate tax, it is still important to keep your estate planning current, or in the event you do not have an estate plan, it is wise to get one started.  Along with tax reasons, there are several other reasons to plan your estate, such as:

1. To avoid probate;
2. Prevent possible disputes between family members;
3. Protect children and grandchildren in the event of a divorce, lawsuit or premature death;
4. Provide for your own care and well-being in the event of incapacity.

While these are only a few reasons to have an estate plan, they are important reasons.  Are you prepared?