To hear estate planners and “death tax” opponents tell it, a crisis looms. Unless Congress acts by Dec. 31, the amount exempt from the federal estate tax will drop from $5.12 million to $1 million and the number of estates subject to the tax will jump 16-fold to 52,000 a year. But the truth is that Congress is likely to eventually approve a $5 million (and at least a $3.5 million) exemption retroactively, so most of these families may pay extra lawyers’ fees but not a big tax bill.
Meanwhile, the tax focus obscures the real estate planning crisis affecting way more families. Nearly 2.5 million Americans die each year, and many haven’t signed the basic documents needed to protect loved ones. A 2011 Associated Press survey found 64% of baby boomers didn’t even have a living will, which anyone over the age of 18 should have.
The Real Estate-Planning Crisis Isn’t About Taxes – Forbes.com