We are a mere four weeks away from estate tax D-Day. Congress has failed to resolve the estate tax mess over the last eleven months. With the Lame Duck Congress wrestling with the Bush era tax cuts, the pundits are projecting that Congress won't act now, either. That would mean that on Jan. 1, 2011, the estate tax reverts back to the 2000 levels:  a $1 million lifetime exemption, and a top tax rate of 55%.  That means many people will need to include tax planning in their estate plan, or will need to modify their existing tax planning.  

 

How do you know if your estate is in excess of $1 million?  Add up the fair market value (not your dream value or a low value) of all your assets.  This includes your real property, vehicles, bank accounts, certificates of deposit, the balance of your IRA or other retirement accounts, brokerage accounts, mutual funds and the death benefit of life insurance.  If the total exceeds $1,000,000, after subtracting any major debts, then a death tax will be imposed on the excess over $1 million.  

 

What can you do about this?  Make an appointment with your estate planning professional to explore options to reduce or eliminate the death tax being imposed on your estate.