The document summarizes key points about current estate tax law and planning opportunities. It discusses: 1. The current status of estate and gift tax law and potential legislative changes in 2010. 2. Issues facing estates in 2010, including potential tax consequences if Congress does not change the law to allow for basis step-up. 3. Actions estate owners can take now like reviewing estate documents, gathering basis records, and making gifts or transfers to take advantage of the current tax environment. The presentation provides an overview of estate tax law and encourages attendees to periodically review their overall estate plan from tax, financial, and legal perspectives.

1. The Federal Estate Tax Abyss
Navigate the Estate Tax Headache
to Protect What’s Yours

2. Five Things You’ll Learn
From this Program
1. Current status of estate & gift law
2. Potential legislative changes under
discussion
3. Tax issues facing a 2010 estate
4. Necessary changes to existing wills &
trusts
5. Current planning ideas
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3. Today’s Presenters
 Cynthia (Cindi) Turoski, CPA/PFS, CFP® -
Managing Director of Bonadio Wealth Advisors
cturoski@bonadio.com
 Jack Capron, Esq., CPA,/PFS, CFF – Principal,
Bonadio & Co., LLP
jcapron@bonadio.com
 Jean Bedell, CPA/PFS, CFP® - Manager,
Bonadio Wealth Advisors
jbedell@bonadio.com
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4. The State of the Estate Tax
Estate &
Year Estate & Gift Tax GST/Lifetime Basis
Rate Gift Exemption
Full basis step-up to
2009 45% $3.5M/$1M FMV at death
Carryover basis to
heirs (ugh!), except:
2010 Whatever the top Unlimited/$1M
• Heirs can receive a
individual income
$1.3M step-up
tax rate is (currently
35%) • Spouse can receive
an additional $3M
step-up
Full basis step-up to
2011 55% $1M/$1M FMV at death
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5. What are the legislative
possibilities?
1. Congress takes no action
2. Congress changes the 2010 law –
retroactively or prospectively
3. Choice: Congress allows executors of
2010 estates to choose which rules
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6. Potential Consequences if
Congress Does Not Change 2010
Law
1. Assets could flow to the wrong trusts/individuals,
completely disinheriting some
2. More or less may flow to charity than intended
3. Estates could be tied up because executor is unsure
on how to administer
4. Executors may decline to serve due to liability
exposure
5. Heirs cannot substantiate the cost basis on inherited
assets
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7. Have NYS Estate Tax Laws
Changed?
1. NYS exemption remains the same at
$1M – 16% rate
2. Unsure if carryover basis rules would
apply to NYS
3. Unsure if certain trusts would qualify as
marital trusts for NYS
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8. What Should You Do
in the Interim?
1. Review wills and living trust agreements
a. Clearly depict your intent
b. Make sure assets would flow as
intended (formulas)
c. Consider flexible provisions for potential
law change scenarios
d. Give executor discretion on how to
allocate step-up
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9. What Should You Do
in the Interim?
1. Review wills and living trust agreements
(cont.)
e. Ensure trust provisions qualify for
spousal step-up
f. Consider spousal trusts vs. outright
bequests
2. Gather and organize your cost basis records
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10. Periodically Review Overall Estate Plan
– From a Tax, Financial & Legal
Perspective
Review all the pieces/details of your estate
plan – not just legal documents
1. How & where assets will flow
2. Beneficiary designations
3. How & where estate taxes will be paid from
4. How assets are titled
5. Coordinate business agreements with
estate plan
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11. Periodically Review Overall Estate Plan
– From a Tax, Financial & Legal
Perspective
Examples of unintended consequences
1. Wrong beneficiary (ex-spouse, deceased
parent, special needs child, 2 out of 3
children)
2. Thinking the will controls distribution of all
assets
3. Assets being distributed to children too
young
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12. Periodically Review Overall Estate Plan
– From a Tax, Financial & Legal
Perspective
Examples of unintended consequences
(cont.)
4. Disinheriting a child because of where estate
tax gets paid from
5. S Corp stock to certain trust – inadvertently
terminating S election
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13. Other Planning Strategies
Under Current 2010 Law
1. Consider making taxable gifts at
chance of 35% rate
2. Consider making distributions from
GST trusts now
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14. Other Timely Planning
Opportunities (based on current
economic environment)
1. Low Interest Rates:
a. Intra-family loans
b. Grantor Retained Annuity Trusts
(GRATs)
c. Charitable Lead Annuity Trusts (CLATs)
2. Low Values
a. Lifetime gifting (stock, real estate,
business interests, etc.)
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15. The Five Things We Want You
To Take Away
1. Need to determine how assets will pass
under your current estate plan
2. Need to review current wills & trusts &
create appropriate documents
3. Importance of working with a qualified,
professional team to ensure your wishes
are carried out
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16. The Five Things We Want You
To Take Away
4. Importance of being aware of legislative
developments
5. Planning ideas in a low interest rate
environment
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17. Questions?
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18. Thank You
We appreciate you taking the
time to attend today’s
program!
Please follow us at:
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