Concern over the stuttering economy, uncertainty surrounding the upcoming election and the ambiguity of future estate tax legislation have left many high net-worth Americans stunned and leery about planning for estate taxes. Furthermore, back-of-the-napkin calculations and standard estate tax discussions no longer address their concerns.
The 2010 Tax Relief Act staved off looming tax increases and offers unique estate planning opportunities through 2012. This law reinstated the unified gift and estate tax credit with an applicable exclusion amount of $5 million per person and $10 million per couple (all-time highs) and a top tax rate of 35% for the estate, gift and generation-skipping transfer (GST) taxes for 2011-2012. Further, the estate, gift and GST tax exemptions were each indexed for inflation beginning in 2012 and are now $5.12 million. In 2013 and beyond, assuming Congress fails to pass a new law, the exemption will drop to $1 million and the top rate will rise to 55%. Without knowing what changes will come on Jan. 1, 2013, many people are taking a wait-and-see approach.
3 conversations to have with clients today
Here are three key reasons to start talking with clients today about their legacy planning goals.
3. Give clients what they want. Guarantees, flexibility and control are the three drivers behind consumer behavior today.
In this time of turbulence and uncertainty, clients want life insurance products with guarantees, such as no-lapse guaranteed universal life insurance, where the death benefit will be paid out regardless of market performance.