You may have heard enough to make you nauseous about the 2010 tax act that changed all the rules we've ever known about estate planning. However, you may not have noticed that one of the most adverse parts of this new law is that your estate plan is now on a two year election cycle.
The 2010 estate tax changes expire on December 31, 2012. On January 1, 2013, all the estate tax and planning benefits of the new law disappear into the ether unless Congress passes a new tax bill before the end of 2012.
What this means is that estate planning has been placed on a two year election cycle by Congress. Whoever prevails in the 2012 elections will dictate what our new estate planning rules will be. No certainty, no continuity, no doing what's right for our country. Congress has geometrically increased the complexity of planning even the simplest estate.
There are several steps you can take to protect yourself and family from this latest example of Congressional foolishness. Here they are:
1. Make your estate plan flexible to respond to whatever Congress decides.
2. Consider building your estate plan so that Congress is removed from the equation. Avoid using formulas that are based on what Congress may change in the future.
3. Review your estate plan with your estate planner every election year.
4. Be proactive and not reactive. Plan before you need it when you are not acting under emergencies, disasters or family crises.
Let me know if you have questions about these four steps and how you can use them to protect your family.