Bringing up the estate tax with your aging parents can be as awkward as inquiring after their sex life—or worse, because it could imply that you are chiefly interested in your inheritance. But making sure that they understand the current complexities of the law will help their money end up where they want it.
Talking about estate taxes is especially important right now, since the federal estate tax doesn’t exist this year because of a legal quirk. Next year it’s back, with an exemption of only $1 million (down from $3.5 million in 2009), unless Congress acts. That means navigating the ebb and flow of tax rates will require some complex maneuvering. Lawyers warn that the wrong wording in a will could inadvertently leave a spouse no money or accidentally award everything to an ex-wife, for example. Ignoring the issue could also mean giving Uncle Sam a big chunk of one’s estate inadvertently. continue reading>>