But for "repeal", my documents are current. Do they need to be revised?

Yes: for the following reasons:

Marital Trust Changes: If your documents create marital trusts, changes will most likely be needed to make sure that the marital trust qualifies for the new $3,000,000 "increase" provision for a surviving spouse. Not all marital trusts will qualify; failure to qualify could mean unnecessary capital gains for a spouse of as much as $600,000.

Fiduciary Authority Changes: The new law allows a "general basis increase" of $1,300,000 for each estate. This "basis increase" is to be allocated by the executor or trustee. Documents as currently drafted are silent on how this allocation right is to be used. Without direction and authority given to them in the document, executors and trustees may be sued by beneficiaries no matter how the allocation is made.

Retirement Benefit Changes: In January the IRS issued new rules in the retirement plan area which also dictate revisions to your plan. Properly drafted trusts which are named as a beneficiary under such plans will allow the trust beneficiaries to use their own life expectancies in making withdrawals from such plans, rather than requiring a payout over as few as 5 years.

It is our opinion that amendments to deal with the above matters should be made promptly. We believe necessary revisions can be confined to 2 Articles in the trust (dealing largely with the trustee's powers and duties). We intend to attempt to draft such amendments in a way that will not require further changes if repeal ultimately does not go through.

I was just about to have my estate plan done. Should I wait?

No: the non-tax reasons to complete your estate planning outweigh any uncertainty over how the tax laws will finally read. These non-tax reasons include:

• Probate avoidance
• Disability protection during your lifetime
• Asset-protection planning for your beneficiaries
• Trust planning for second marriages (your own or your heirs)
• Supplemental needs trusts for disabled beneficiaries
• Trust planning for minors or for other beneficiaries whose financial abilities are unproven or impaired

In addition, there are substantial tax advantages to going forward now, so that, if a death does occur before repeal, the maximum amount will be sheltered from tax under the new increased exemptions. An unplanned or poorly drafted plan can mean that your heirs pay over $1 million in unnecessary estate taxes between now and 2010, and may waste $4.3 million in possible step-up after repeal in 2010.

Does it make any sense to consider still making "advanced planning" gifts?

Yes: Advanced planning techniques continue to make sense for income and estate tax reasons. These techniques include:

• Qualified Personal Residence Trust (QPRT)
• Grantor Retained Annuity Trust (GRAT)
• Irrevocable Life Insurance Trust Agreement (ILITA)
• Irrevocable Descendants Trust (IMT)
• Supplemental Needs Trust (SNT)
• Standby Trust (STT)
• Charitable Remainder Trust (CRT)
• Family Limited Partnership (FLP)

These types of planning techniques allow property to be transferred to your beneficiaries, often at reduced values (because of valuation discounts taken for fractional interests in property, because of deferred use of the property by the beneficiary, or because of other restrictions which are involved in the gift). Often this means that taxable income can be redirected to family members in lower income tax brackets. Further, the value of property gifted is "frozen" at current values for estate tax purposes.

The increased gift tax exemption means these type of gifts can be made without actually paying any tax. In addition to shifting income to other members of your family, these advanced planning options are a good hedge against estate tax (1) in the event tax repeal is "repealed" after 2010, or otherwise modified, or (2) in the event a death occurs before 2010.

Indeed, it may make better sense to use these techniques now with the increased gift tax exemption so that at least this part of your planning will not be subject to the further uncertainty that seems to characterize enactments in this highly politicized arena.