Wishing You a Happy, Healthy, and Less Taxing New Year!
By Michelle M. Mulvena, Esq.
Happy New Year! It’s that time of year for reflection and resolution. Your estate plan is the perfect place to start. Now is the time to reflect on your planning objectives.
Is your estate plan more than five years old? Have your assets changed? Won the lottery? Perhaps your estate plan was done when the kids were young. Now they have their own families. Have there been changes to the law that would impact your planning objectives?
If the answer to any of these questions is yes, you should review your estate plan with an estate planning attorney.
New Tax Relief Law – Is it a Relief?
A few weeks ago Congress passed the “Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010.” The law is only effective for the next two years, so seize the moment. Under this law there is a $5 million dollar federal estate tax exemption and a 35% tax rate until the end of 2012. Yes that’s right I said $5 million. That means that only estates in excess of $5 million will be taxed at death. Many of you are thinking “that doesn’t even impact me”. But wait there’s more . . . there is also a $5 million federal lifetime gift tax exemption. Meaning for the next two years you can give away up to $5 million of your estate. Previously you were capped at $1 million for lifetime gifting. This change is significant if you own a closely held business and are thinking of passing it along to your kids or if you want to set up that family trust to ensure your kids and grandkids benefit from your years of hard work.
Early planning is like preventive medicine. Be proactive and make your estate plan a top priority in 2011.
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Michelle Mulvena is an attorney at Moschella & Winston, LLP, a law firm specializing in legal planning and protection for individuals and families for over 30 years. She is also host of the Somerville Cable TV show, “Legally Speaking with Michelle Mulvena.” Please contact her at mm@moschellawinston.com or (617) 776-3300.