Estate Planning Developments
2010 ISSUES MAY NECESSITATE CHANGES TO ESTATE PLANNING DOCUMENTS
Less than eight months of Federal estate tax repeal remain before the estate tax is slated to automatically spring back into existence on January 1, 2011. Members of Congress continue to discuss resurrecting the estate tax retroactively to eliminate the repeal, but nothing has happened yet. It remains unclear if and when Congress will act to address the 2010 repeal, or to change the law that currently is in place for 2011 and beyond.
The 2010 repeal may cause unintended consequences in some wills and revocable trusts because of formula bequests (where the amount of the bequest is determined by using a formula) and due to references to certain tax code provisions that are inoperative in 2010.
States are attempting by legislation to help interpret wills whose terms do not operate correctly during 2010. However, only a handful of states have passed such legislation, and in some cases the legislation still does not reach the intended result. New York has proposed legislation but to date it has not been enacted. Thus for some individuals, amendments to estate planning documents will be necessary to ensure that property will pass to the intended recipients.