What do you think future estate tax law exemption will be?

[BillH_CA]

What do you think future estate tax law exemption will be?
Hello,

I'm in CA helping my mom sort through some future decisions regarding Trusts. We do have a lawyer who is providing advice and documents.

The tough thing is that some decisions may need to be made based on the likelihood of future tax law changes. Right now (correct me if I'm wrong) CA has no estate or inheritence tax and the U.S. has a $5.12M exemption.

But my quesiton is that it seems that the U.S. laws setting the exemption will expire in 2013 and starting 2013 the estate tax exemption goes back down to $1M.

Is this correct? And based on your best estimates for the political climate do you think the change will occur, or is there a likelihood that the exemption will end up somewhere between $1M and $5M?

Basically, what is your guess about what the tax exemption will be starting 2013?

Thanks,

Bill H

 

[tranquility]

There is no way to predict. If people buy the "death tax" argument, it stays the same. If they, instead, prefer to tax dead people, it goes up. But, even if you can guess the way the wind will blow, you cannot guess how hard.

Plan under current law and change when you know. That's what all the cool kids are doing.

 

[ecmst12]

Sounds like the best advise is NOT to plan an estate with the intent of not looking at it again until after the person is dead, but to plan on reviewing the arrangements every year or so to make sure things are still set up as they need to be.