With the changing economy, security and trust are at a premium. The desire for families to preserve their wealth has become more and more commonplace not matter what the size of the estate. Federal estate tax exemptions increased January 1, 2009 and will be repealed January 1, 2010 absent some action by Congress before that. Many people feel that there is no need to revisit or review their estate plans because of these changes and the reduction in the size of their estates because of the economic malaise.
It is precisely this set of circumstances that suggest now is the most advantageous time to plan. Reevaluating one’s goals now is even more important because of the impact the economy has had one most everyone’s wealth. For example, if there is no perceived estate tax, what is the best way to protect the wealth for the spouse and children. Asset protection has become a primary goal even without the estate tax. For business owners, transition of assets to potential buyers now makes sense because the value of the assets are lower thus resulting in lower capital gains and transfer taxes. If the business is anticipated to increase in value as the economy improves, transferring the assets now makes a great deal of sense. Several estate planning strategies have become even more attractive in this low interest rate environment and might result in low or no gift tax. Also, for business owners contemplating a business exit, initiating transactions now in the current business environment may generate the best results possible. Grantor Retained Annuity Trusts, Charitable Lead Trusts, intrafamily loans and sales to intentionally defective trusts (IDGIT’s), all have greater potential, and proper structuring now can save family a great deal.
Changing circumstances call for review of estate plans to ensure that family goals are maintained and can still be attained. This is best accomplished by regular and periodic review of plans that have been made and which may be affected by changes in the law around you.