BUSINESSWEEK ONLINE : OCTOBER 30, 2000 ISSUE
BUSINESSWEEK INVESTOR Do's and Don'ts While the Rules Change With substantial reform of the gift and estate tax likely next year, financial planners and lawyers are advising clients to be cautious in drawing up estate plans. Some tips: -- DO cover the basics. You'll need a will or revocable living trust to direct the disposition of your assets no matter how the tax debate turns out. -- DO use your $10,000 annual gift exclusion to move funds to children or other heirs. A couple can give their three children up to $60,000 in assets each year. -- DO use up your lifetime tax exemption--currently $675,000--for gifts while you're living, rather than saving it for your estate. The tax bite is lighter on gifts than estates. -- DON'T make substantial gifts to children or heirs that will exceed your lifetime tax exemption. If the tax is later reduced or repealed, you won't get a rebate. -- DON'T overlook special trusts--like grantor retained annuity trusts (GRATs) or qualified personal residence trusts (QPRTs)--that let you transfer assets with very little gift tax. Family limited partnerships are also useful. -- DON'T get your hopes up too high: Outright repeal of the estate tax is unlikely. Reform--including higher exemptions and lower rates--stands a better chance. DATA: BUSINESS WEEK _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP					RELATED ITEMS Waiting for the Death of the Death Tax TABLE: Do's and Don'ts While the Rules Change INTERACT E-Mail to Business Week Online

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