Friday, August 14, 2009

Press Coverage of Estate Planning This Week (August 14, 2009)

Martin Vaughan of the Wall Street Journal reports that the U.S. House of Representatives will likely propose a temporary one-year extension of the current federal estate tax to carry through 2010 and prevent repeal of the estate tax next year.  This extension would be in lieu of a more long-term adjustment of the estate tax, which is scheduled to expire in 2010 but return in 2011 at a level that would impact far more taxpayers.  See Bid to Block Estate-Tax Repeal (Aug. 13, 2009).

Susan B. Garland of Kiplinger's Retirement Report points out that even if the federal estate tax threshold remains $3.5 million per person, state estate tax levels often differ.  Many states, including Vermont, have an estate tax threshold below the federal level, which can create unexpected estate tax liabilities and may require updating your estate plan.  See Protect Heirs From State Estate Taxes (Aug. 6, 2009).

Amy Feldman of BusinessWeek notes that new Roth IRA conversion rules taking effect in 2010 create opportunities for certain conventional IRA owners.  One big incentive is using a conversion for money to be left to children or grandchildren, because taxes paid now to complete the conversion are no longer part of your taxable estate, and the inheritors will never owe income tax on the distributions later.  See Is a Roth IRA Right for You? (Aug. 13, 2009).