Preoccupied with other matters, Congress has taken no action on the Federal Estate Tax, which expired on Dec. 31, 2009.

Beginning with deaths occurring on January 1 this year, a "carryover basis" system applies to estates of decedents. This new tax will affect only assets that have increased in value during the decedent's lifetime, and only if the decedent's estate has accumulated capital gains greater than:
• $1.3-million for a single individual;
• $3 million transferred to a surviving spouse. Will this change in the law affect your estate? More >>>

For married couples with existing estate plans, the end of the Estate Tax repeal could have an unexpected affect on if the couple has a Marital Trust/Bypass Trust Plan (also known as an A/B plan). If the wording of the trust document leaves all the assets to the bypass trust, the surviving spouse could be cut out of the estate plan! Standard formulas written into many estate plans would leave spouses with nothing. For example, the will of the deceased spouse may allocated a maximum amount that can pass free of estate tax to a trust benefiting other family members, leaving only the residual to the surviving spouse. Because there is no estate tax during 2010, this planning defect would cause problems for the surviving spouse. Please call us at (413) 567-5600 if you would like to review your planning documents.

Unless Congress acts during 2010, next year (2011) the estate tax will be reinstated, with only a $1 million exemption, There is talk that Congress may act to abolish the "carryover basis" system, and retroactively reinstate the estate tax, sometime during in 2010.

Reduce or eliminate estate and income taxes, protect the estate from creditors, and properly distribute assets to estate beneficiaries

Massachusetts and Connecticut Probate of Wills, Reformation of Trusts, Guardianship - Conservatorship, Probate Litigation.