Newspaper article THE JOURNAL RECORD

Lawyers, Accountants May Get Windfall from Changes in Estate Tax Law

Newspaper article THE JOURNAL RECORD

Lawyers, Accountants May Get Windfall from Changes in Estate Tax Law

Article excerpt

The tax-cut bill that President Bush signed into law contains a costly surprise for the 17 million or so Americans with a net worth of $500,000 or more.

Those who paid to have a will and estate plan drafted under the old law need to pay to have it reviewed and in many cases rewritten, say lawyers and accountants who specialize in working with the affluent and the truly rich. Without revisions, these experts said, widows may be left with far less than they expected, children and grandchildren may be stuck with huge tax bills that could have been avoided and litigation over who receives tax-favored assets may erupt, even in families whose members have worked together to build and preserve their wealth.

Under the new law, the amount exempt from estate taxes and the rate of tax on larger sums are slowly reduced beginning next year until 2010, when the estate tax is repealed for one year. The law is then reinstated in 2011.

These roller-coaster changes can turn an estate plan drafted under the old law to eliminate estate taxes into a financial disaster, experts warned. Assuming repeal actually takes effect in 2010, heirs of someone who dies that year could receive $1.3 million tax free or 35 percent of that inheritance could be taken in federal income taxes depending on whether a will complied with the old or the new law, these experts said. …

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