Estate Planning Opportunities in 2011 and 2012

Phil KaufmannThere now is some certainty to the federal estate tax. To the surprise of many, the changes that occurred in late December were more positive for taxpayers. These new tax laws give us an opportunity to review estate plans to take advantage of unique opportunities that may only exist in 2011 and 2012.

For the next two years, there is a credit on the federal estate tax per individual of $5 million. Essentially, this means the first $5 million of your estate upon death is exempt from the federal estate tax. Another advantage includes the maximum estate tax of 35% and a portable credit between husband and wife. Portable credit means that rather than the $5 million credit, a full credit could be used by a surviving spouse under certain circumstances.

The gift tax exemption for the next two years is also $5 million. This is first time the lifetime gift tax amount has been the same as the credit upon death. This again presents very unique planning opportunities. Not only is the first $5 million of an estate exempt from the federal estate tax, but in 2010 and 2011 you can give up to $5 million as a gift without incurring gift taxes.

The Ohio estate tax will still be in effect through December 31st, 2012. With a properly prepared estate plan you can reduce the impact of this tax and pass on more of your wealth to family.

Many clients use estate planning to manage their assets if they become incapacitated, to avoid probate and to provide control over the timing and amount of distribution to beneficiaries. Furthermore, clients may have a situation that requires a Special Needs Trust. If you already have a Special Needs Trust, it is important to have an attorney review it to be sure it is kept current with the ever changing laws.

Other techniques that can be used in many estate plans for a positive tax advantage include a Grantor Retained Income Trust and transfers to a trust for a promissory note with discounting for minority interests of businesses. To learn more about these estate planning tools, or to review your current plan, please contact your Stark & Knoll attorney at 330-376-3300 or via e-mail at

Stark & Knoll Co., L.P.A. 3475 Ridgewood Road Akron, Ohio 44333-3163
Phone: 330-376-3300 Fax: 330-376-6237

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