WHAT ABOUT DEATH (ESTATE) TAXES?

No one knows what is going to happen with the death tax.  For the next few years estates under $2 million pay no tax.  Then the limit goes to $3,000,000 and in 2010, there will be no death tax.  However, in 2011, the death tax may come back with a vengeance taxing all estates over $600,000.  Considering that your estate includes all your assets and usually includes life insurance proceeds, many middle class Americans with big life insurance policies are subject to tax now and most will be caught at the $600,000 level.  

Estate tax rates are confiscatory maxing out at 47%.  The good news is that, for most people, it is relatively easy to plan around these impositions.  Sometimes the answer can be as simple as changing the ownership of your life insurance polices. Larger estates may need more sophisticated plans. 

Unless you want to take 47% of your estate from your estate and give it to the government, you need to look into some planning.  It is important that you plan now because most estate tax calculations look back to see what you owned three years ago.  If you wait to plan, you might have to wait three more years for your efforts to have any effect.