“If you keep thinking about what you want to do or what you hope will happen, you don’t do it, and it won’t happen.”

– Desiderius Erasmus

Hi Aaron,

I hope you’ll allow me to be a proud dad for a minute. My youngest daughter (the six year old), got first place in first grade at her school’s science fair this week!  It was a project having to do with measuring different amounts of baking soda mixed with vinegar and how much it blew up a balloon.  Very fun!  She definitely gets her science gene from her mom — not me that’s for sure!

Well, I thought I’d talk a little this week about some changes in the estate planning laws.  You might have heard that the estate tax has been “repealed” for 2010.  While, this may be good news for a few families, something like 6,000 or so, but for the rest of us…

It’s not all rosy.

Read on to hear what I mean…

Aaron Miller’s

“Straight Talk” Personal Strategy

Married Couples Affected By New Estate Environment

Because of a Congressional failure to act before the end of 2009, there’s good news and bad news to report on the Estate Planning front.

The good news is there’s no Estate Tax if you die this year.  The bad news is, that you may owe significant capital gains taxes if a loved one dies this year and leaves you significant appreciated assets. If you have total assets of around $1 million or more (including face value of life insurance, retirement plans, home equity, etc.) you should make sure their estate plan is up to date.

Congress has had nine years to prevent this from happening, but has failed to act.

Under the provisions of a tax-cut bill enacted in 2001, the estate tax exemption has been gradually raised over the past eight years, while the tax rate on estates has been reduced.

For estates of those dying in 2009, only assets worth $3.5 million or more were subject to estate taxes, at a rate of 45 percent. But now, for the year 2010, the estate tax has disappeared entirely, only to be restored in 2011 at a rate of 55 percent on estates of $1 million or more, which is exactly where things stood before the 2001 change.

Many Couples At Risk

The new world of “no estate tax” places at particular risk certain couples who have built in “Credit Shelter” trust provisions (also called “Bypass Trust” or “Family Trust” provisions), which are designed to allow both spouses to take advantage of their estate tax exemptions.

These are common arrangements used in estate planning for married couples. With the estate tax gone, one possible problem is that the wording of some of these trusts could cause all assets to completely bypass the surviving spouse when the first spouse dies. For a more detailed explanation of this potential problem, see this blog posting:


Everyone — Especially Married Couples — Should Have Their Estate Planning Reviewed ASAP.

Because of these tax changes, a review of your existing estate planning documents is essential.

Hope that helps!

To your family’s wealth, health, and happiness!

Aaron Miller

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