Top Considerations
So what should be at the top of people's minds in 2011 when giving as part of their estate planning?
Haefele says the most important thing is the choice of vehicle, whether it's a donor-advised fund, a foundation or a charitable lead or remainder trust. Donors want to pick the best vehicle, not just to remove their assets from their taxable estate for their heirs, but also to protect and best channel assets to causes that matter to them, either right away or in the future.
"The impending increase in the estate tax, coupled with the higher income tax rates next year, makes this year-end particularly important for planning," says Milligan.
Milligan adds that the more pressing thing this year is to minimize gift and income taxes, as higher rates loom and donors must take advantage of today's lower rates by year's end. These are things that can be planned for, whereas the estate tax repeal cannot be-unless a client is terminal and expected to die by January 1.
"Clients and their advisors need to craft estate plans that contemplate an unknown and ever-changing estate tax landscape," says Duggan. "Conventional drafting does not cut it anymore. One's estate plan needs to accommodate a circumstance where on the one hand there is no estate tax whatsoever and on the other virtually all of the estate is subject to a very high estate tax."
Bruce W. Fraser, a financial writer in New York, writes on wealth management, financial planning, investments, retirement, small business and the green environment for many publications. A frequent contributor to Financial Advisor magazine, he is writing a book on millionaires. Contact him at [email protected]. Visit him at www.bwfraser.com.