Yuma Sun:  Many of us spent our childhood years playing sports and games. An important part of our development was learning the rules. Once we understood the rules, we could develop creative strategies for winning.

 When the rules changed, our strategies needed to adapt. Estate planning is no different. Late in 2010, President Obama signed into law changes to estate and gift tax rules.

 If you haven't already, it's important to review the new rules and make adjustments to existing estate planning and gifting strategies. Here are a few of the changes that may affect your plans:

 • Estate taxes reinstated — In 2010, for a single year there was no estate tax. During 2011 and 2012, the top estate tax rate will be 35 percent and the estate tax exemption amount will be $5 million. In 2013, these temporary changes will end and we may see a return to higher estate tax rates and lower exemption amounts.

 • Generation-skipping transfer tax repealed — Generation-skipping transfers allow one person to reassign ownership of assets to another person who is two or more generations younger. For example, a grandparent might transfer ownership of property, by gift or at death, to a grandchild. Historically, GSTs have been taxed at the highest estate tax rate. However, for 2010, the GST tax was temporarily repealed. As a result, gifts made to grandchildren during 2010 were assessed gift tax and not GST tax.

 The GST tax returned in 2011 with the top rate at 35 percent. Executors of estates for those who died during 2010 chose between the estate tax rules for 2010 and those for 2011 by filing an estate tax return […]

Law Firm Newswire: It might not be something your children can pull out from under the tree and unwrap this holiday season, but the gift they may appreciate the most is the gift of asset protection.

“With family as the focus of so much attention during the holidays, it’s a natural time to consider their financial security,” said Brandon estate planning attorney Reginald Osenton. “No matter what age your children are, the time is never wrong to plan for the future.”

Even though most people tell their loved ones how they want their estate managed when they are gone, the only way to ensure it is done correctly is to put it in writing. “We put together plans for families so that when the time comes, everybody is taken care of exactly the way you want,” Osenton said.

A properly drafted estate plan with a qualified attorney will save your family money in the long run in future taxes, legal fees and other costs. It can truly be a holiday gift that will pay for itself.

Too many families are consumed by unnecessary stress and tension when it is time to divide an estate. Careful planning can eliminate all of the finger-pointing and he said, she said. “I have seen families fight over the smallest things. And it all could have been avoided if it had been planned out before hand,” Osenton said.

While a detailed will is the cornerstone of a good estate plan, health care issues can be handled before they arise as well. A power of attorney and a health care surrogate designation will let you determine now who will be making the decisions if […]

Estate planning attorneys Cecil Smith and Carol Gonnella have written an informative article about the coming impact of federal estate tax laws next year and the year after.  The article starts:

“The estate tax laws are in a state of flux, and no one is sure what Congress will do in the near future. This article is about the laws today, and the importance of planning now rather than waiting until Congress may … or may not … act. It addresses tax liability in a broad sense, and does not take into account the impact of state death taxes, if any, or the implementation of advanced estate planning strategies such as LLCs, QPRTs, BERTs, ILITs, GRATs, Charitable Gifts, etc, to not only creditor protect assets during life, but to reduce or eliminate the estate tax bite upon death. . . . There are three ways to reduce (or even eliminate) federal estate taxes just by using Internal Revenue Code exclusions and/or exemptions that are available to everyone

1. The Unlimited Marital Deduction . . . .
2. The Basic Exclusion Amount . . . .
3. Portability . . . . “

Investment News:  Politics, the weak economy and low interest rates have combined to create one of the best environments for estate planning in a generation, according to experts. “If individuals are trying to transition assets to the next generation, we currently have a perfect storm — in a good sense — to do it,” said David Scott, vice president of advanced sales for Penn Mutual Life Insurance Co.

The elements of that perfect storm begin with a $5 million exemption from estate taxes ($10 million for married couples), which was part of the Middle Class Tax Relief Act of 2010 enacted in December. The value of real estate assets and securities are at low levels, making it more attractive to give such assets to other individuals. And with interest rates near zero, wealthy clients also can make loans to their children and to trusts at a very low cost.

Wills, Trusts & Estates Prof Blog:  Twenty-two states and the District of Columbia currently impose a death tax on their taxpayers. These taxpayers have options when it comes to avoiding paying these taxes, however.

One option is to make a large lifetime gift. The current federal law grants taxpayers a $5 million gift exemption ($10 million for married couples). Another option is to make annual exclusion gifts. Taxpayers can give an unlimited number of people gifts up to the annual exclusion amount ($13,000, currently) without incurring a gift tax.

Smart Money:  You have to hand it to Congress: It's doing its best to turn one of the more wearying parts of retirement planning — getting your estate in order — into something of a party. The challenge for you and me is to stay clearheaded.

The Tax Relief Act of 2010, passed in December, made headlines primarily for retaining the Bush-era income tax cuts. But lawmakers also approved changes in estate and gift taxes that left lawyers and accountants gushing. (“Unprecedented.” “Historic.” “Astonishing.”) Most notably, the gift-tax exemption jumps from $1 million to $5 million, which means Americans can now bequeath the latter amount without paying a dime in taxes. This exemption is separate from the annual gift-tax exclusion, currently $13,000.

Wills, Trusts & Estates Prof Blog:  As I previously blogged, taxpayers can now convert a 401(k) or IRA to a Roth IRA and give their grandchildren up to $5 million without incurring the generation-skipping tax.  However, this tax break may close before 2013 if Congress does not act soon.

Wills, Trusts & Estates Prof Blog:   Two changes to the tax code now give investors with large 401(k) accounts the ability to give their grandchildren a tax-free inheritance of $400 million or more. Congress created this estate-tax break in two steps last year…

Forbes:  “The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, P.L. 111-312 (2010 Tax Relief Act), which President Obama signed into law on December 17, 2010, makes significant changes to the gift tax.”