Trump's Proposal to Repeal Estate Tax Will Not Effect More Than 99% of Americans Who Are Extempted From Estate Tax. Estate Tax Elimination Does Not Eliminate Need for Trust and Estate Planning.

If president-elect Donald Trump follows through on his campaign promises, the estate tax will be eliminated.  Currently, the rules are straightforward: A married couple is exempt for the first $10.9 million in their estate, and they pay a 40 percent tax on the amount above that. Mr. Trump’s campaign proposal seems straightforward: Repeal the estate tax — the "death tax" in his words. There is a second part to his plan which involves keeping taxes on capital gains over $10 million when family assets are sold.

Back in 2012, most tax experts considered the estate tax resolved when the Republican-majority Congress and President Obama reached a so-called grand bargain on taxes. As part of that deal, the current estate tax exemption was set, with annual increases indexed to inflation. With that agreement, more than 99 percent of Americans were exempted from the estate tax. Last year, for example, the IRS processed just 4,918 federal estate tax returns.  Few families have more than $10.9 million in their estate.

But Mr. Trump’s proposal is not a simple repeal. His plan also said, “Capital gains held until death and valued over $10 million will be subject to tax to exempt small businesses and family farms.”  In other words, the tax on capital gains above $10 million would have to paid only when, or if, the assets were sold.

Foreign Property Considerations In Estate Planning and Probate

In our practice, we have a significant number of clients who own real property or have bank account in a foreign country whether China, Mexico, England, Costa Rica, England, Canada or France or other countries. Our clients are becoming more global and mobile, especially when buying properties abroad for retirement, vacation or for their families.

One issue that arises with foreign property is the risk of double taxation. It is possible that when foreign property is transferred, U.S. estate tax will apply, but so will the tax of the foreign country. When a citizen of the United States dies and owns property in a foreign country, the property in the foreign country will be subject to U.S. estate tax if the estate is subject to taxation at all. There are treaties with certain countries which prevent the double taxation and give credit.

Another issue that comes up is multiple wills in different jurisdictions. Somestimes one last will and testament may ultimately revoke another. When ttwo wills are needed, it is important that attorneys from each country work and coordinate the estate planing and wills.

If there is no will or trust, in civil law countries, such as France, the property vests in the decedent’s heirs immediately upon the death of the decedent. This is unlike the United States and other common law countries, where there generally must be a personal representative or executor to transfer title or, at a minimum, some sort of court recognition of the death and transfer of property. 

For example, if a client owning property in France desired that property vest in a long time companion and there was no will or trust, the property would immediately vest as set forth under French succession laws. On the other hand, if the client wanted the property to vest in their heirs, then drafting a will in France to deal with the French property would be not be needed.  

We work with attorneys in other countries while advising clients with foreign property during the estate planning or probate phase. It is always best to address these issues during estate planning rather than going through the difficult and expensive process of dealing with them after death through the probate process. As we live in a more global society and smaller world, these issues are becoming more common. Don't forget to prepare for all your estate planning and probate issues, particularly when foreign real property is involved. 

Posted by Henry (Hank) Moravec III
Email: hm@moravecslaw.com
Office: 626-793-3210

In Estate Planning, Making Plans For Prized Collections

The New York Times has an article "Making Plans For Collections, Heartstrings Included" about what happens to collections (art, comic books, marbles, Christmas villages, antiques, etc.) when someone dies.

Money is relatively easy to divide up but how does a collector decide what to do his or her prized collection that it has taken years to amass and reflects a passion that may not be shared by the heirs? The collection may also be hard to value.

The article shares the options available to collectors:

(1) Selling the collection before one's passing;

(2) Passing on the collection and keeping it in the family by using methods such as the annual gift exclusion of $13,000 or creating a trust to protect the collection from creditors;

(3) Giving it away to museums or charities depending on the collection; or

(4) Creating a charitable remainder trust which is especially useful for collectibles that are taxed at a 28% rate.

The real point of the article though is that it is not simply the value of these collections but the emotions that are involved in them that create the issues in deciding what to do with them in estate planning. This is why planning is key even though it is something that is simple to put off. It is typical to put estate planning off but a good way to get around the emotions is to hire an estate planner, schedule meetings and create an outside structure that requires one to address the issues -- emotional or not -- that typically arise during estate planning.

Posted by Henry (Hank) J. Moravec, III, a partner at Moravec, Varga & Mooney. For a complimentary 30 minute consultation (telephonic or in person), you can e-mail Hank Moravec at hm@moravecslaw.com or call him at (626) 793-3210 or (818) 769-4221.

IRS Offers Filing & Penalty Relief for 2010 Estates; Basis Form Now Due Jan. 17, 20; Extension to March Available For Estate Tax Returns

Since we help our clients prepare and file estate tax returns, it is important to note that the IRS announced on September 13, 2011 that the due dates for filing Forms 8939 and 706, as well as paying the estate tax for those estates that do not elect out of the estate tax, will be extended.

The IRS announced that large estates of people who died in 2010 will have until early next year to file various required returns and pay any estate taxes due. In addition, the IRS is providing penalty relief to certain beneficiaries of these estates on their 2010 federal income tax returns.

This relief is designed to give large estates, normally those over $5 million, more time to comply with key tax law changes enacted late last year.

• The IRS is providing the following relief:
• 1) Large estates, opting out of the estate tax, now will have until Tuesday, Jan. 17, 2012, to file Form 8939. This special carryover basis form, required of estates making this choice, was previously due on Nov. 15, 2011. Because this is a change in the specified due date rather than an extension, no statement or form needs to be filed with the IRS to have this new due date apply.
• 2) 2010 estates that request an extension on Form 4768 will have until March 2012 to file their estate tax returns and pay any estate tax due. Normally, a six-month filing extension is automatically granted to estates filing this form, but extensions of time to pay are granted only for good cause. As a result, most 2010 estates that timely file Form 4768 will have until Monday, March 19, 2012 to file Forms 706 or 706-NA. For estates of those dying late in 2010 (after Dec. 16, 2010 and before Jan. 1, 2011), the due date is 15 months after the date of death. No late-filing or late-payment penalties will be due, though interest still will be charged on any estate tax paid after the original due date.
• 3) Special penalty relief is provided to many individuals, estates and trusts that already filed a 2010 federal income tax return, or obtained an extension and plan to file by the Oct. 17, 2011 extended due date. Late-payment and negligence penalty relief applies to persons inheriting property from a decedent dying in 2010, who then sells the property in 2010 but improperly reports gain or loss because they did not know whether the estate made the carryover basis election. Details are in Notice 2011-76 posted on the IRS website.

• Posted by Henry (Hank) J. Moravec, III, a partner at Moravec, Varga & Mooney, A Partnership. For a free 30 minute consultation (telephonic or in person), you can e-mail Hank Moravec at hm@moravecslaw.com or call him at (626) 793-3210 or (818) 769-4221.
  
  With respect to tax and estate law issues, Hank Moravec has over 20 years' experience as one of the best Los Angeles estate and trust tax attorneys and Los Angeles probate litigation attorneys and is available should you need legal advice regarding your own or a family member's situation. For a consultation, You can e-mail Hank Moravec at hm@moravecslaw.com or call him to request a consultation.
  
  The firm website is http://www.moravecslaw.com/. The firm has two offices and consultations and meetings can be held at either office. We can also arrange to have consultations at your home or office.
  
  The San Gabriel Valley office is located at 2233 Huntington Drive, Suite 17, San Marino, California 91108. There is ample free parking adjacent to the firm's office. Call (626) 793-3210.
  
  The San Fernando Valley office is located at 4605 Lankershim Boulevard, Suite 718, North Hollywood, California 91602-1878. Call (818) 769-4221.

Tax Relief Act of 2010: It Finally Happened

Well, no one would have predicted this!

Essentially, Congress had ten years to provide some certainty to the U.S. Federal Estate and Gift tax system. Incredibly, with the Democratic Party in control of both houses of Congress and the White House, the Estate tax was allowed to lapse completely in 2010. As 2010 wore on, there were periodic statements of what should happen to the law, should there be a retroactive bill? Would the law really be allowed to return to the 2001 standard, with high rates and only a $1,000,000 exemption?

Then, the mid-term elections occur and we have divided government again. Yet now, with a technical "lame duck" congress, incredibly, a new tax bill emerges!

And what a bill! In addition to extending the Bush tax cuts on the income tax side (along with some very interesting temporary adjustments to the Social Security withholding tax), the Tax Relief Act signed into law on December 17, 2010, lowers estate, gift and generation-skipping transfer (GST) taxes for a two-year period.

Here are some of the estate and gift highlights of the Act:

■ The estate tax will be reinstated for 2011 and 2012 with a top rate of 35 percent. The exemption amount will be $5 million per individual in 2011 and will be indexed to inflation in following years.

■ Estates of people who died in 2010 can choose to follow either 2011 or 2011's rules. The estate may choose between an estate tax based on the $5 million exemption and a step up in basis of the estates assets, or no estate tax and a modified carryover basis in the estates assets.

■ For gifts made after December 31, 2010, the Act reunifies the gift tax with the estate tax, allowing for an exclusion of $5 million and the 35% tax rate. For gifts made during 2010, the exclusion amount is $1 million and the maximum tax rate is 35%.

■ The generation skipping transfer tax exemption for gifts made or decedents dying after December 31, 2009 will be equal to the applicable exemption for estate tax purposes. Transfers made during 2010 subject to the generation skipping transfer tax are subject to a tax rate of 0%, and will be subject to a rate of 35% for transfers in 2011 and 2012.

■ In addition, the TRA allows for the estates of decedents dying after December 31, 2010 to elect to transfer the unused portion of the $5 million exclusion to a surviving spouse.

Aside from the fact that a $5 million estate tax exemption per person, or $10 million per couple, is good news, there are many other planning opportunities raised by this new bill, many of which are caused by the fact that the gift tax exemption will now also be $5 million per person. This is the huge difference between the law since 2001 and now. Under prior law, with the gift tax exemption at $1 million, many clients who could otherwise afford to do so (from a financial perspective) could not make gifts to children or grandchildren. Now, there are many gifts which can be made, in trust or otherwise, and the parent/donor will not owe tax.

Perhaps the most surprising part of the Act is that estates of people who died in 2010 can elect to use either the new rules or the "old" rules. This addresses the situation in which an estate may owe significant capital gains tax even though no estate tax is owed. This is a surprising change because many times such inconsistencies are allowed to remain in the tax code because there is not much in the way of political capital to simply fixing an inconsistency. We have several estate matters which will be affected by this part of the Act.

The fact that the Act is in place for only two years is interesting. Perhaps Congress has realized that having these "deadlines" in place actually helps when it comes to compromise. We will see in two years' time.

Posted by Henry (Hank) J. Moravec, III, a partner at Moravec, Varga & Mooney. For a complimentary 30 minute consultation (telephonic or in person), you can e-mail Hank Moravec at hm@moravecslaw.com or call him at (626) 793-3210 or (818) 769-4221.

He focuses his practice on Estate Planning, Trust and Probate Administration, Beneficiary and Trustee Representation, Probate Litigation, Tax Law, and Nonprofit Law. He represents clients throughout Southern California and his offices are conveniently located for clients in the Los Angeles, Orange, Santa Barbara, Riverside and San Bernardino Counties.

The firm website is http://www.moravecslaw.com/. The firm has two offices and consultations and meetings can be held at either office. The San Gabriel Valley office is located at 2233 Huntington Drive, Suite 17, San Marino, California 91108. Telephone: (626) 793-3210.

The San Fernando Valley office is located at 4605 Lankershim Boulevard, Suite 718, North Hollywood, California 91602-1878. Telephone: (818) 769-4221.

Proposed Estate Tax Deal for Two Years: 35% Tax Rate And $5 Million Exemption. Bigger Question For Most Americans: Do You Have An Estate Plan?

On December 6, 2010, President Obama announced that he has reached a deal with Republicans regarding the estate tax and other Bush Tax Cuts. Under the deal, the repeal of the estate tax in 2010 would not be extended. The estate tax would be revived, but not as it is scheduled.

Under current law, if Congress reaches no agreement, the estate tax is scheduled to come back in 2011 at a top rate of 55% (60% in some cases) and an exemption of a mere $1 million for individuals.

Under the Obama-Republican deal, the estate tax would come back at a rate of 35% and with an exemption of $5 million for individuals -- for two years. However, it is unknown whether the lame duck House would pass an estate tax exemption this high. This proposal may also not be popular among the Democrats.

From a planning perspective, the question is what should we advise our clients? Our approach is simple. Plan with the current law and not based upon any politicians' proposal.

One problem with this current proposal is that it's not a permanent solution. Under the deal the 55% tax rate and $1 million exemption would return in 2013. Married taxpayers will still need to utilize highly flexible planning that will allow the surviving spouse to adjust the planning after the first spouse’s death. This can be done by utilizing a “wait-and-see” trust that can adjust for different Federal and State exemptions and can be adjusted for up to 15 months after the date of the first spouse’s death if congress changes the law.

Get an estate plan. According to a Lawyer.com survey in early 2010, many Americans do not have proper estate plans. Only 35% of Americans now report having a will and only 21% have a trust. Thus, while a great deal attention is focused on the proposed legal changes, it is important to focus on yourself and your family and get an estate plan in place and not wait for Congress to act.

Posted by Henry (Hank) J. Moravec, III, a partner at Moravec, Varga & Mooney. For a complimentary 30 minute consultation (telephonic or in person), you can e-mail Hank Moravec at hm@moravecslaw.com or call him at (626) 793-3210 or (818) 769-4221.

He focuses his practice on Estate Planning, Trust and Probate Administration, Beneficiary and Trustee Representation, Probate Litigation, Tax Law, and Nonprofit Law. He represents clients throughout Southern California and his offices are conveniently located for clients in the Los Angeles, Orange, Santa Barbara, Riverside and San Bernardino Counties.

The firm website is http://www.moravecslaw.com/. The firm has two offices and consultations and meetings can be held at either office. The San Gabriel Valley office is located at 2233 Huntington Drive, Suite 17, San Marino, California 91108. Telephone: (626) 793-3210.

The San Fernando Valley office is located at 4605 Lankershim Boulevard, Suite 718, North Hollywood, California 91602-1878. Telephone: (818) 769-4221.

LEGISLATIVE UPDATE -- Odds On No Action On Estate Tax This Year Just Went Through The Roof

Its October 1, and there is still no action pending on Federal Estate Tax this year. Based upon several well publicized remarks, including a speech by Charles Grassley on the floor of the Senate and an op-ed piece by Robert Rubin in the Wall Street Journal ("Bring Back The Estate Tax Now"), it is fair to say that, with one quarter left in 2010, policymakers have finally noticed that the tax is coming back at only a $1 Million exemption and a 55% rate next year.

With an election looming in a month, there is basically no chance of action prior to Mid-November, I think that any retroactive application is now over.

I also think that a return to the $3.5 Million exemption and 45% rate is now the most likely scenario, because the government needs the money and has to get it from somewhere.

In an October 2, 2010 New York Times article entitled "TARP Bailout to Cost Less Than Once Anticipated" there is a good opportunity to imagine, as a legislator, (or even a top aide, like all those guys and gals in "The West Wing") how you would (a) address this issue and more importantly (b) explain it to your constituents.

It is no easy task. The New York Times article mentioned above, for example, points out that, according to one poll, 3 out of 10 voters are against the"bailout" even though the bailout is not going to cost $700 billion and may actually make money for the government. In another New York Times article "In Tax Cut Plan, Debate Over the Definition of 'Rich'" (Sept. 30, 2010) is a very thorough dissertation on one of the major issues in tax policy -- who, exactly, are "the rich?"

The only thing missing is the one fact which is rarely discussed, tax policy must address distribution of whatever it is that is being taxed. (It is rarely discussed because it is not entertaining enough, that is for sure!) For example, imagine an economic system with one peasant who is only paid in food, who works for the farm owner. The farm owner, who is "only 50% of the population" pays "100% of the taxes." He pays 100% of the taxes because he makes 100% of the income. The U.S. economy is more complex than that, but the principal is the same, in order to raise money you have to levy taxes on actual streams of income or assets -- you cannot just tax "in theory."

So, now read the two articles and figure out the best solution. (I know I don't know the best solution, that is for sure!) Remember, these are the guidelines:

(i) if you actually apply the taxation to those who have the money, you are vulnerable to the argument that "so and so voted to have 5% of the population pay 37% of the tax";

(ii) you know the average voter basically does not like rich people, since a program to essentially stabilize one of the worst recessions in memory is thoroughly demonized even though it may actually be profitable for the taxpayers, basically on the grounds that people don't like banks; and

(iii) no one agrees on who the "rich" are -- at least no one agrees based on any logic.

Good luck. And if you ever wonder why the Internal Revenue Code is complicated, or why politicians only speak in sound bits with no substance, imagine trying to explain these considerations in 30 seconds.

Posted by Henry (Hank) J. Moravec, III, a partner at Moravec, Varga & Mooney. For a complimentary 30 minute consultation (telephonic or in person), you can e-mail Hank Moravec at hm@moravecslaw.com or call him at (626) 793-3210 or (818) 769-4221.

He focuses his practice on Estate Planning, Trust and Probate Administration, Beneficiary and Trustee Representation, Probate Litigation, Tax Law, and Nonprofit Law. He represents clients throughout Southern California and his offices are conveniently located for clients in the Los Angeles, Orange, Santa Barbara, Riverside and San Bernardino Counties.

The firm website is http://www.moravecslaw.com/. The firm has two offices and consultations and meetings can be held at either office. The San Gabriel Valley office is located at 2233 Huntington Drive, Suite 17, San Marino, California 91108. Telephone: (626) 793-3210.

The San Fernando Valley office is located at 4605 Lankershim Boulevard, Suite 718, North Hollywood, California 91602-1878. Telephone: (818) 769-4221.

Tax Season Is Here: Estate Planning And Tax Issues

As we head into the fall, Tax Lawyers and Accountants know that this time of the year, more so than the spring April 15 deadline, is really Tax Season -- the time when Congress typically passes new law to be effective the following year.

This "Tax Season" is especially interesting (well, it's "interesting" if you follow tax laws for a living) since (i) many general provisions of the pre-9/11 2001 Tax Act are set to expire at year end, and (ii) among those provisions is the Federal Estate Tax, currently repealed but set to return at a very low exemption amount $1,000,000 per person. Throw in a weak recovery from a recession and a fairly serious Federal Deficit (and, for us in California, what can only be described as a continuing budget crisis), and there is a lot of potential for laws which could effect large swaths of taxpayers in a material way.

Of course, its also a mid-term Congressional election year, which means both parties will be due to issue "highly tactical" if not always "technically accurate" statements about tax law.

Here is a short list of what might make the front page of the papers this fall:

1. At what rate will the Estate Tax return? With so much of the year gone by, the odds of any sort of retroactive tax appear to drop by the day. However, Congress may be tempted to simply let the law switch back on January 1st, and if that happens a $1,000,000 exemption will mean that many taxpayers who did not have to concern themselves with Estate Taxes at all will need to do so.

2. Will income tax rates return to something approaching Clinton-era rates? For taxpayers in the top bracket, this means about a 4 to 5 percent increase. The debate about whether that should or will happen would require quite a bit of space (maybe a couple of blogs?) but what it may well mean is that if there is an opportunity to take income this year as opposed to next year or later, the savings could be material.

3. Will the Social Security and Medicare tax rates change? There is no area of tax more misunderstood than this one, mainly because neither political party has any interest in boring taxpayers with the actual details when so many votes can be had by getting everyone fired up with policy debate.

The fundamentals are:
(i) Both programs are more than 70 years old,
(ii) for the first 40 or so years, they were "pay as you go" the rates of tax were based on the payouts of the programs on an annual basis,
(iii) in the mid 1980's it was decided that workers should be, essentially "over charged" to build up a "reserve" for the baby boom generation bulge.

I put "over charged" and "reserve" in quotes because both terms are highly subjective, the reality is that if Social Security paid out $X since 1985 all of the taxpayers were charged about $2X during that time. Why? Well, this excess did not technically go into a big mattress, but went to basically reduce overall Federal Government borrowing (i.e., we own less to China and more to "ourselves").

So, when anyone says "the Social Security Trust fund will run out" it actually means that general tax revenue will need to start paying back the excess revenue borrowed since 1985. This is sometimes portrayed as a disaster, but in actuality its about what the Iraq occupation has cost. This will not happen in the short term (i.e., this fall), but there are going to have to be some adjustments somewhere in the system, and the information given to taxpayers is going to be far from the basic facts needed to make an informed decision -- it's just too easy to demagogue this issue.

4. Will California adjust its own taxes at some point? We don't talk about State taxes much, especially since California does not have a separate Estate Tax. However, with the state budget crisis seeming to persist year after year, how long will it be before California considers it?

Posted by Henry (Hank) J. Moravec, III, a partner at Moravec, Varga & Mooney. For a complimentary 30 minute consultation (telephonic or in person), you can e-mail Hank Moravec at hm@moravecslaw.com or call him at (626) 793-3210 or (818) 769-4221.

He focuses his practice on Estate Planning, Trust and Probate Administration, Beneficiary and Trustee Representation, Probate Litigation, Tax Law, and Nonprofit Law. He represents clients throughout Southern California and his offices are conveniently located for clients in the Los Angeles, Orange, Santa Barbara, Riverside and San Bernardino Counties.

The firm website is http://www.moravecslaw.com/. The firm has two offices and consultations and meetings can be held at either office.

The San Gabriel Valley office is located at 2233 Huntington Drive, Suite 17, San Marino, California 91108. Telephone: (626) 793-3210.

The San Fernando Valley office is located at 4605 Lankershim Boulevard, Suite 718, North Hollywood, California 91602-1878. Telephone: (818) 769-4221.

First Billionaire Dies in 2010 While Estate Tax Is Dormant. Don't Forget About Elimination Of Automatic Step-Up In Basis For Capital Gains Tax.

When America's first billionaire John D. Rockefeller (pictured at right) died in 1937, his estate paid tax at a 70% rate. In contrast, the estate tax rate on Houston billionaire Dan L. Duncan's estate, unless Congress passes a retroactive Estate Tax, is 0%. Last week the New York Times weighed in concerning Duncan's death in an article entitled "Legacy for One Billionaire: Death, But No Taxes."

The issue that was not addressed, however, was whether or not there was any tax due to the fact that in 2010 the automatic "step-up" in basis for capital gains tax purposes was also repealed.

Mr. Duncan’s worth was estimated by Forbes magazine at $9 billion, making him as the 74th wealthiest in the world. If Mr. Duncan's life had ended three months earlier, his estate would have been subject to a federal tax of at least 45 percent. If he had lived past Jan. 1, 2011, the rate would be even higher — 55 percent.

Instead, because Congress allowed the tax to lapse for one year and gave all estates a free pass in 2010, Mr. Duncan’s four children and four grandchildren stand to collect billions that in any other year would have gone to the Treasury.

As is typical with New York Times articles, the most interesting analysis is in the "comments" to the article. Both sides of the Estate Tax argument are well represented, and make for good reading. Well, good reading if you like to read about estate and tax policy, at least.

However, do not forget that 2010 was a year in which there was an "estate tax capital gains tax" swap. At least 20 New York Times commentators were unaware that in 2010 the estate tax was repealed, but so was the automatic "step-up" in basis for capital gains tax purposes. In 2009, for example, the law provided that for estates which did not contain retirement plan assets (which are taxed as income to the heirs as such funds were never taxed at all to the decedent) there would be no tax at all for estates up to $7 million in value per couple.

Depending on the composition of the estate, and the state in which the decedent lived, in 2010 a $7 million estate could pay as much as $1 million or so in capital gains when assets are sold.

Capital gains vs. Estate tax is not quite an "apples to apples" comparison, as the taxes are imposed at different rates, and of course at different times (for example, if Duncan's company is not sold by his heirs, capital gains will not be due) but 2010 was definitely not a "totally tax free year" in the case of inherited assets.

Posted by Henry J. Moravec, III. Henry (Hank) Moravec is a partner at Moravecs, A Professional Law Corporation. The firm is located at 2233 Huntington Drive, Suite 17, San Marino, California 91108. He is a very experienced Los Angeles estate planning attorney and is available should you need legal advice regarding your own situation.

You can e-mail Hank Moravec at hm@moravecslaw.com or call him at (626) 793-3210 to request a consultation. The firm website is http://www.moravecslaw.com/

How Should You Plan Your Estate In This Time Of Federal Estate Tax Uncertainty?

Now let's move on to a more practical topic. I keep writing about the uncertainty with the federal estate tax. A more pertinent question that applies to everyone is: With this uncertainty in the law, what should and can I do about it?

How Do We Plan In This Time Of Flux?
3 Key Things To Remember.

First, do an estate plan. If you fail to plan -- you are planning to fail. Also, keep your plan updated. Make an annual checkup with your estate planning attorney (even if for 15 minutes) to let him or her know if there are any changes in your circumstances or to see if the changes in the law effect you.

Second, it's all about your loved ones! If estate taxes would not affect you, don't think there is no need for an estate plan. The reality is that estate taxes currently affect less than one percent of people. So why do you need an estate plan or trust? Your family, your loved ones or your charities. That's why.

Third, don't procrastinate on this issue. We all procrastinate on some tasks but put this one at the top of your "to do" list as what I call a "most important task"! And don't even think about using this estate tax uncertainty as another excuse to procrastinate. (Please excuse my lame procrastination joke :)

An experienced estate attorney can help break all this down into very manageable tasks for a reasonable fixed fee and will do almost all the work for you in tax planning and helping you carry out your wishes. You just have to make the major decisions such as who will be your child's guardian and who will receive your assets.

Without a current estate plan, you could be harming the futures of those people who are the most important to you. Ask yourself: Do I want confusion and turmoil to be what I leave to my heirs and family? We all know the answer to that question is a resounding "no."

But go ahead and ask yourself:

How would I want my assets to be managed if I became incapacitated with early dementia or passed away?

Who would care for my minor children if something happens to me or my spouse?

Do I want my family in litigation over my estate? How do I avoid probate litigation?

Do I want piece of mind on a day-to-day basis that my estate plan is in place?

These are questions we all have to ask ourselves. And the answers remind us why we all have to plan regardless of whether or not we are subject to the federal estate tax.

Posted by Henry (Hank) J. Moravec, III, a partner at Moravec, Varga & Mooney. For a complimentary 30 minute consultation (telephonic or in person), you can e-mail Hank Moravec at hm@moravecslaw.com or call him at (626) 793-3210 or (818) 769-4221.

Mr. Moravec is a very experienced Los Angeles estate planning attorney, Los Angeles trust attorney and Los Angeles probate attorney. He has more than 20 years' experience in avoiding taxes with estate planning and is extremely dedicated to his clients and helping them create a plan that is tailored to their wishes, finances, helps avoid probate and taxes, and takes into account their families' unique situation.

He focuses his practice on Estate Planning, Trust and Probate Administration, Beneficiary and Trustee Representation, Probate Litigation, Tax Law, and Nonprofit Law. He represents clients throughout Southern California and his offices are conveniently located for clients in the Los Angeles, Orange, Santa Barbara, Riverside and San Bernardino Counties.

The firm website is http://www.moravecslaw.com/. The firm has two offices and consultations and meetings can be held at either office.

The San Gabriel Valley office is located at 2233 Huntington Drive, Suite 17, San Marino, California 91108. Telephone: (626) 793-3210.

The San Fernando Valley office is located at 4605 Lankershim Boulevard, Suite 718, North Hollywood, California 91602-1878. Telephone: (818) 769-4221.