Most of us can not plan when we will pass away. It could happen tomorrow or in 20 years. The inability to plan for when you will pass away can create problems for your estate. Because the estate tax changes almost every year, you need to have a flexible estate plan that can absorb those changes.
If you die in 2012, the estate tax only affects estates that are over $5.12 million. If Congress does not manage to pass legislation by the end of the year, that will change. The estate tax exclusion limit will go down to $1 million. That will impact a lot more families. It’s an election year, so getting Congress to agree on anything could be challenging, especially on tax issues.
You really should not have to worry about the estate tax limitations from year to year. You can create an estate plan that does what you want and leaves enough liquid assets for your heirs to pay any estate tax. You will need to revisit the plan from time to time to account for dramatic shifts. Now is a good time to revisit any old plans, for example, just in case your time runs out next year. Talk to an experienced and qualified estate planning attorney about how you can protect your heirs from burdensome estate taxes.