Is your estate plan flexible? — Estate tax law uncertainty requires options
Abstract: Absent congressional intervention, on Jan. 1, 2013, exemptions will greatly decrease and tax rates greatly increase. Many people are taking advantage of the current generous gift tax exemption by shifting as much wealth as possible to their heirs this year. But it’s also important to build flexibility into an estate plan so that it can be quickly adapted to future changes in the law. This article discusses two options in particular: the qualified disclaimer and the credit shelter trust. A sidebar explains why, when using the latter tool, it’s important to carefully draft formula clauses to ensure that they account for every possible contingency.