Estate Planning in Uncertain Times

For those who believe that the estate tax will be repealed, or the exemptions substantially increased, we are unaware of any pronoucements from the President elect, or the House, that such will be the case in a time of unprecedented federal deficits. Remember, an estate tax was enacted in 1797, repealed in 1802; enacted in 1862, repealed in 1890; enacted in 1898, repealed in 1902; enacted in 1916, then reformed in 1930, 1976-1993, 1997 and 2001.
To circumvent the resulting loss of revenue when the Federal Government increased the personal exemption at least 25 states have already enacted tax laws designed to replace the lost estate tax revenues, with more states likely to follow in the near future.
With the current federal exemptions of $2,000,000 per person ($4,000,000 per couple with proper planning), certain individuals feel that there is no serious need for comprehensive estate planning. However, there are numerous reasons other than taxes for implementing a properly drafted estate plan, such as: (1) avoidance of the time-consuming, privacy-invading and costly probate procedure; (2) providing for family members who now have, or may have in the future, special needs; (3) protection from future creditors of a surviving spouse, children and grandchildren; (4) protecting the estate from challenges launched by greedy and/or power-mad heirs and/or their spouses; (5) providing for an efficient distribution of assets to family members; and (6) provising for succession involving a family business.