Common Post-ATRA Estate Planning Mistakes

In the Press · September 2, 2014

The American Taxpayer Relief Act of 2012 (ATRA), P.L. 112-240, changed the game in estate planning by significantly increasing the amount of wealth that a taxpayer may pass free of federal gift and estate tax to beneficiaries. Many advisers and clients who are under ATRA’s $5.34 million exemption (inflation-adjusted for 2014) believe their past planning is sufficient, that estate taxes are no longer relevant as part of their planning, and no further action is required.

This false sense of security can lead a client (and his or her adviser) to make several mistakes, which include:

  • Ignoring the impact of the state estate tax
  • Blind reliance on “portability”
  • Failing to understand that the cost of long-term care may cause more significant erosion to family wealth than estate or income taxes

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