SinclairProsser Law, LLC
Estate Planning & Elder Law Attorneys
(410) 573-4818 or (301) 970-8080 •
Upcoming Estate Planning Seminars are February 9th, 12th, 13th and 14th!
Tell your clients, family and friends. Go to
for locations, dates, time and to register your seat(s)!
2008: The Calm Before the Storm
The amount that one can give at death free from estate tax (known as the
applicable exclusion amount) will remain at $2 million for 2008, as will the
estate and gift tax rate of 45%. After 2008, the whole picture changes. In
2009, the applicable exclusion amount increases to $3.5 million – meaning
that with proper planning a married couple could pass as much as $7 million
free of estate tax. Then in 2010, the estate tax is repealed (temporarily) –
but a new tax replaces it.
Under current law, most assets receive a “step-up in basis” at death, which
means that a beneficiary can sell most inherited assets for what they were
worth at the time of death without having to pay any income or capital gain
taxes upon sale. When the estate tax is repealed in 2010, the “step-up in
basis” also will be repealed and a “carry-over basis” regime will be
installed. As a result of this, except for some designated exceptions,
beneficiaries will be faced with increased income taxes in the form of
capital gain taxes to replace the estate tax that will be eliminated. Some
commentators have estimated that the tax revenues raised for the government
under this regime, if left in place for the long-term, would eventually
outstrip the revenues projected under the estate tax regime.
Like a phoenix rising from the ashes, under current law the estate tax is
scheduled to re-appear in 2011. In that year, the tax law reverts to the law
as it existed in 2001, meaning the applicable exclusion amount will be
lowered to $1 million and the estate and gift tax rates will once again
become progressive, capping out at a maximum marginal rate of 55%. If 2011
arrives without a change to this law, many clients who thought they had no
estate tax worries based on what they were told throughout the period from
2001 to 2010 will be facing some serious estate tax consequences.
This roller-coaster tax law makes estate planning for individuals with net
worth in excess of $1 million unpredictable and requires careful estate
planning by a knowledgeable estate planning attorney. Drafting of plans with
the forethought of dealing with the scheduled changes and the flexibility to
deal with anticipated further changes in the law is critical.
The American Academy of Estate Planning Attorneys (“AAEPA”), of which our
law firm is a member, has some of the top minds in the industry working on
these planning strategies. The AAEPA has introduced the concept of Legacy
Wealth Planning, a paradigm shift from the way most estate planning
attorneys have traditionally approached planning for clients. The Academy
also is pursuing a Private Letter Ruling that, if approved by the Internal
Revenue Service, will change the manner in which most estate plans will be
drafted in the future.
To learn more about how we can assist you and your clients with their estate
planning needs, call Tamiko Neal or Jacqueline Short at 410-573-4818 or
301-970-8080 to schedule a telephone conference with one of our attorneys
who focuses on estate planning. Also, visit our website at
www.sinclairprosserlaw.com to learn more about Legacy Wealth Planning and to
see a schedule of upcoming consumer seminars as well as CE seminars for
SinclairProsser Law, LLC a charter member of the American Academy of Estate
Planning Attorneys, focuses on estate planning and administration, including
revocable living trusts and charitable remainder trusts. Call Tamiko or
Jacqueline at 410-573-4818 or 301-970-8080 to schedule a complimentary 15
minute telephone appointment to discuss your client’s situation with one of
our firm’s attorneys. We have offices in Annapolis, Bowie and Millersville.
We welcome any feedback you may have about our educational alerts. You can
email email@example.com or call at (800) 366-4615.
Member of the American Academy of Estate Planning Attorneys