Estate planning: Will Congress make it unnecessary?

Lately there's been a lot of talk in Washington about repealing the federal estate and gift tax. Last year Congress passed a bill containing such a provision, but President Clinton vetoed the bill, claiming it would benefit only the rich. If the estate tax is ever repealed, will estate planning become a thing of the past? 

For most people, the answer is no. 

Your will. A key component to most estate plans is having a will drawn up. In your will, you designate how each of your assets (excluding those assets that have named beneficiaries or are held jointly with right of survivorship) will be distributed upon your death. 

If you have young children, your will should name a guardian for your children and trustees for the assets that they will inherit. And if you have heirs who aren't as financially responsible as you would like, you can designate in your will that their inheritance be held in trust.

Other documents. In addition to your will, two documents essential to your family's financial well-being are commonly drafted during the estate planning process. A durable power of attorney allows another person to make financial decisions on your behalf if you become incapacitated, and a medical directive or "living will" sets out your preferences for medical treatment if you become too ill to communicate these wishes yourself.

Business owners. If you're a business owner, estate planning will still be a must. Even though businesses will no longer need to be sold or leveraged in order to pay estate taxes, proper succession planning is needed to ensure that your business will pass to your heirs as smoothly as possible.

Since the rules surrounding estate and gift taxes are very complicated and continually changing, please give us a call if you would like to discuss your current estate plan.

See also:
    Handling Estate Financial Issues

© Copyright 2001 Raymond S. Kulzick. All rights reserved. 010105.