Page 12 March 2011 2010 suprisingly good year for estate planning By Bob Jones From an estate planning perspective, 2010 was an interesting and surprisingly good year for the taxpayer. Many estate planners were preparing for what seemed inevitable prior to the mid- term election, the return of the federal estate laws of 2000 and a greatly reduced federal estate and gift tax exemption. Congress at the 11th hour passed a revision of the estate and gift tax laws providing very positive taxpayer relief. The tax relief, however, is only scheduled to stay in effect for two years. The more important changes in the tax laws involving estates and gifts arising after Jan. 1, 2011 are: Uni fi ed Estate and Gift Tax Exemption Individual taxpayers now have a lifetime uni fi ed estate and gift exemption of $5 million for the next two years, thereby resulting in a husband and wife having a combined exemption of $10 million. This exemption may be used to make gifts during the lifetime of the taxpayer or used against assets passing through the taxpayer’s estate should the taxpayer pass away during the two-year period. The $1 million limitation of lifetime gifts during this period has been removed. Portability of the Estate Tax Exemption Husbands and wives during the next two years are able to make use of each other’s estate tax exemption when there are insuf fi cient assets in the estate of the fi rst to die. This assumes of course that both deaths occur within the next two years. Estate and Gift Tax Rate Reduction The estate and gift tax rate for the next two years is now 35 percent. This is a reduction from the 2009 rate of 45 percent and what would have been a rate of 55 percent had Congress not acted. Again, the estate and gift tax applies only to assets that exceed the new uni fi ed credit of $5 million per person or $10 million for a married couple. The greatest danger with the new laws is that they will create a sense of false security because of the temporary high exemptions. Remember that these laws sunset or expire in two years. Continued on page 23 Bob Jones Lara Broadrick 602.628.7332 lara.broadrick@russlyon.com larabroadrick.com lara lara Broadrick REALTOR ® Experience. Networking. Results. NEW LISTING 5905 E. Calle Tuberia 5 5 NEW 3837 N 59th Place SOLD! 5337 E. Calle Del Medio 6520 E. Monterosa NEW LISTING NEW LISTING Enroll Online Today! PhoenixUnion.org/Experience DARE TO COMPARE - We’ll Put Our Schools Up Against Any Other School! Central High School ZZZ3K[&HQWUDO+LJKRUJ‡   Arizona’s First Cambridge International School - &HQWUDOKDVLPSOHPHQWHGWKHKLJKO\DFFODLPHG &DPEULGJH,QWHUQDWLRQDO&XUULFXOXPVFKRROZLGHSURYLGLQJ D)5((FROOHJHSUHSDUDWRU\HGXFDWLRQIRUDOOVWXGHQWV Camelback High School ZZZ&DPHOEDFN+6RUJ‡   School of G.E.A.R.S. (Gaming and Web Design, Engineering, Architecture, Robotics and Sustainability) - &DPHOEDFN*($56RIIHUVVWXGHQWVVHYHUDOFDUHHU DQGFROOHJHSDWKZD\VHPSKDVL]LQJ6FLHQFH7HFKQRORJ\ Engineering and Math. North High School ZZZ1RUWK+6FRP‡   International Baccalaureate World School - 2QHRIWKHODUJHVW,%SURJUDPVLQ$UL]RQDWKLV ULJRURXVDQGLQWHUQDWLRQDOO\UHFRJQL]HGSURJUDPKDV SUHSDUHG1RUWKVWXGHQWVIRUSUHVWLJLRXVXQLYHUVLWLHVVXFK DV+DUYDUG6WDQIRUG<DOH3ULQFHWRQ and many more. w w w w w N Rigorous, College-Preparatory Education N Top Teachers N Great Facilities N Full Array of Arts & Athletics N Endless Opportunities PHOENIX UNION HIGH SCHOOL DISTRICT - “Preparing Every Student for Success in College, Career and Life.”

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