For an article on some estate planning considerations (and reconsiderations) during a recession, see Smaller Though It May Be, It’s Time to Look at the Estate, by Paul Sullivan, New York Times, 3/20/2009.
Excerpts from the article:
The biggest issue, given both the recession and the flux in federal estate tax laws, is whether wills already drawn up still fulfill their intent.
* * *Just as you should periodically rebalance your portfolio, you need to rebalance your will. To take full advantage of the $7 million exemption for couples, each spouse needs to have $3.5 million of assets in his or her name. Given the across-the-board drop in asset values, spouses may want to rethink who owns what, at least on paper.
* * *For simplicity, many people added clauses to wills that put whatever the exemption amount was in a trust for their children and left the rest to the surviving spouse, who is not subject to the estate tax. That tax-free level kept rising, from $675,000 in 2001 to $3.5 million this year. But if your estate was worth $6 million in 2001 but is now worth $4 million, allowing the new limit to go automatically into a trust would leave your spouse without enough money.
Read the full article here.
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It is always beneficial to have a proper estate plan (no matter how lavish or humble your estate may be) if for no other reason than so your surviving family will be able to enjoy the property you have left them. If you don’t have a will and you leave it up to the process of intestate succession, then things move rather slowly and it might take years for your relatives to realize the gifts you’ve left for them. But if you have a plan then the distribution is much easier. Even though anyone could have an Anna Nicole Smith kind of relative who slows own the process for everyone with frivolous legal tactics, you shouldn’t resign yourself to that eventuality and think that estate plans are useless. Fact is, they’re incredibly useful and if everyone had one there would be far fewer needs for probate courts.