Financial Planning

Your Financial Future
By IRA CANDIB, CFP®

Will the Estate Tax Stay Repealed for 2010?
In 2001, a law was passed that gradually phased out the federal estate tax through 2009, and repealed it altogether in 2010. That law, however, "sunsets" or expires in 2011 and reinstates pre-2001 tax law levels (with an exemption of $1 million and a top tax rate of 55%). Since 2001, the economic and political climate in the United States has changed significantly. The federal budget deficit has ballooned, the financial markets have been in turmoil, and most importantly, power has shifted to the Democrats. So, the question is: just how likely is it that 2010 will be an estate tax-free year?

Chance of repeal?...virtually zero
Of course, anything can happen, but President Obama has made it clear that he believes the estate tax should continue in some form or other. And in the Senate, Finance Committee Chairman Max Baucus has firmly stated "...repeal isn't going to happen.”

Future of the estate tax
President Obama has endorsed the following reforms:

• Freezing the estate tax at 2009 levels ($3.5 million exemption and 45% top rate)
• Indexing the exemption for inflation
• Disallowing or limiting valuation discounts

Beyond tax
Remember that dealing with estate taxes, no matter what the future may hold, is just a piece of your estate plan. An experienced financial professional can help you identify strategies that may help you achieve your overall estate planning goals.



Ira Candib is a registered representative with Financial Network Investment Corporation, a registered broker/dealer, member SIPC, 1025 West 190th Street, Suite #120, Gardena, CA 90248. Financial Network Investment Corporation and NBC Employees Federal Credit Union are not affiliated companies. Brokerage services provided by Financial Network Investment Corporation. Mutual funds, annuities, and other investments available through Financial Network Investment Corporation are not deposits, are not insured by NCUSIF or any other regulatory agency, nor are they obligations of or guaranteed by NBC Employees Federal Credit Union or any other affiliated entity. Such investments will fluctuate in value and are subject to investment risks, including loss of some or all of the principal. Tax Disclaimer: Please note that Financial Network nor any of it’s agents or representatives give legal or tax advice. For complete details, consult with your tax advisor or attorney.