When I
sat down to write this post around noon on December 31, I intended to use today
to write about the current state of the law affecting estate planning. As you
likely know, one part of the Fiscal Cliff is the expiration of the present law
regarding the taxes paid on transfers of wealth at death, the Estate Tax. Tied
to the Estate Tax is the Gift Tax, which taxes certain transfers of wealth
during a person’s life. If Congress does nothing, when the present law expires
the new threshold for estate taxation in 2013 will be $1,000,000. This means
that estates with a value over $1,000,000 and lifetime gifting (with some
exceptions) over $1,000,000 will be subject to taxation. The rate of taxation
is also set to increase from a maximum rate of 35% of every dollar over the
threshold to a maximum rate of 55% of every dollar over the threshold. This is
just one of the results of the nation “going over” the Fiscal Cliff and I could
spend a month of posts explaining those results.
However
since as I was writing this post, Congress had not managed to find the
collective moral courage to set aside partisan bickering, care more for the
good of the nation than their own job security, and fulfill their oath to the
American people, I find it difficult to articulate the state of the law.
Ultimately, no matter what the law is as the sun rises over Washington, D.C.
this New Year’s Day 2013, it can (and likely will) change. Tax rates and
thresholds can be set retroactively, the difference between a tax increase and
tax cut depends on the day of the week the law passes, and the nation’s economy
will not split like the hull of the Titanic in the course of a single day or
even a single month. Instead of a dry recitation of statutory interpretation I
have for you three thoughts:
- It is a new
year. Take a moment to assess your goals from the past year, see how
you did in achieving what you set out to do. Once you know where you came
from, it is easier to plan for the future, so start achieving your 2013
goals today. Whatever else you do with the day is up to you, but I suggest
spending it with friends and loved ones. There are 364 more days to spend
making money, helping others, and fixing the dripping sink, so why not start the year off with a
little enjoyment.
- Thank you for
your trust and support. We have been writing this blog now for
a little over three months and we intend to continue writing it for many
more. Thank you for continuing to use us as counselors, advisors, and attorneys.
It is our greatest pleasure to serve you, your families, and your clients.
We truly appreciate it when we receive new clients through your referrals.
If there are areas of estate planning, business planning, or other law
that you would like to see us discuss here, please do not hesitate to let
us know in the comments or by email.
- Go team! As we go
through the season of college football bowl games and NFL playoffs, may
your team score enough points to
beat their opponent (or if you are so interested, just beat the spread).
A Happy
and Successful New Year to you, your family, and everyone else in your life
from everyone at Finkel Whitefield Selik and the Plainly Legal blog.
Al Ferrara
Matt Ferrara
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