TAX LAW CHANGES AFFECTING ESTATE PLANNING

Estate Tax

The maximum estate that can pass tax-free to a non-spouse, non-charitable beneficiary is currently $2,000,000 for deaths in 2006, 2007 & 2008, $3,500,000 of deaths in 2009. There will be no estate taxes for deaths in 2010. In 2011+ the and back to $1,000,000 for death's in 2011 + maximum estate that can pass tax free to a non-spouse, non-charitable beneficiary shrinks to $1,000,000.

Married persons with an A/B Trust (a trust that provides for the creation of a Survivor's Trust and an Exemption Trust on the death of the first spouse), may still pass double the estate tax applicable exclusion amount to their beneficiaries.

Gift Tax

The applicable exclusion amount for gift tax purposes is $1,000,000. The applicable exclusion amount is not increased for gift tax purposes. The legislation does not provide for the repeal of the gift tax, but it does provide for a reduction in the highest marginal gift tax rate, which will be the same as the highest marginal estate tax rate. After December 31, 2009, the highest gift tax rate will be the same as the highest individual income tax rate, which is slated to be 35% beginning in 2006.

Generation-skipping Transfer Taxes

The GST tax is also repealed in 2010 (and brought back into the law in 2011).

What This Means For You

Although the tax reduction is a step in the right direction, we urge you not to operate under the misconception that the estate, gift, and GST taxes have been repealed. In fact, at least for the next five years, transfer taxes remain a very real obstacle to transferring wealth to beneficiaries. Trusts remain important vehicles for avoiding probate, conservatorships and guardianships.

Every individual's family and financial situation is unique, and I encourage you to contact me to discuss your particular situation. In light of the recent increases in the exemption from estate taxes, many of my clients should consider the following issues, among others:

Obviously, I will be happy to assist you in any way I can. If you would like to meet to update me concerning your family and financial situation and obtain my advice concerning your planning, please call my office to make an appointment.

HIPPA PRIVACY LAW

The recent federal legislation designed to protect your medical privacy may also restrict your health care agents under your durable power of attorney or your trustees of your trust from accessing information. They may find it difficult to access the information needed to prove your inability to make financial decisions or health care decisions, exactly at the time you need them. Additionally, once they are serving as your agents, they may have trouble in gathering the information needed to process your health insurance or Medicare claims.

OFFICE HOURS

My secretary's normal office hours are from 8:00 A.M. through 4:00 P.M., Monday through Friday. I am generally available for appointments during these hours. I am also available by appointment on evenings and some Saturdays. After normal office hours, my phones are answered by voice mail.

REFERRALS APPRECIATED

I have built my practice on client referrals. I appreciate your mentioning me to your family and friends. In addition to the preparation of trusts, wills and powers of attorneys, I handle prenuptial agreements, trust administration, (including trusts that I did not draft), probates, conservatorships and guardianships.

INTRODUCING

SCOTT A. BOURDELAIS

Scott A. Bourdelais an Orange County native, is a graduate of the University of California at Santa Cruz and Loyola Law School at Los Angeles. He is a member of the Orange County and Los Angeles County Bar Associations and the Elder Law and Probate and Estate Planning Sections of the Orange County Bar Association.

Scott has been practicing law in Orange County since 1982. His practice focuses on estate planning, revocable living trusts, wills and probate matters. He resides in Orange with his wife Linda and their five children, Andy, Jonathan, Nancy, Daniel and Kaitlyn. Scott enjoys hiking on local trails and snow skiing.

SEMINARS

I frequently hold free seminars on trusts in Orange County. If you or a friend would like to attend a seminar, call my office for a schedule. I am also available to speak at your social club or civic group

DIRECTIONS TO MY OFFICE

From 55 Freeway: Exit at Seventeenth Street, proceed West to Tustin Ave. Turn Right on Tustin Ave. The Hillview Business Center is on the Left side of Tustin Ave., just past Benjie's. Enter Hillview Business Center through the North driveway and park. Walk between 2070 North Tustin and 2080 North Tustin. 2060 North Tustin is on the right hand side of the walkway, past 2080 North Tustin Ave.

From I-5 freeway: Exit at Seventeenth Street, proceed East to Tustin Ave. Turn Left on Tustin Ave. The Hillview Business Center is on the Left side of Tustin Ave., just past Benjie's. Enter the Hillview Business Center through the North driveway and park. Walk between 2070 North Tustin and 2080 North Tustin. 2060 North Tustin is on the right hand side of the walkway, past 2080 North Tustin Ave.

From 22 freeway: Exit at Tustin Ave., proceed South on Tustin Ave. Stay in the right lane. The Hillview Business Center is on the Right side of Tustin Ave. Enter the Hillview Business Center through the North driveway and park. Walk between 2070 North Tustin and 2080 North Tustin. 2060 North Tustin is on the right hand side of the walkway, past 2080 North Tustin Ave.