By Dave Lucas
http://stream.publicbroadcasting.net/production/mp3/wamc/local-wamc-876550.mp3
Albany, NY – With the Federal estate tax currently set to expire next year as a result of the Economic Growth and Tax Relief Reconciliation Act of 2001, many New Yorkers face a financial planning and estate tax quagmire, as we hear in this report from Capital District Bureau Chief Dave Lucas.
With the Federal estate tax currently set to expire next year as a result of the Economic Growth and Tax Relief Reconciliation Act of 2001, many New Yorkers are facing a financial planning and estate tax quagmire, according to Michael P. Smith, President and CEO of the New York Bankers Association (NYBA) and Melinda Sartori, NYBA Trust Division Chair and Executive Vice President of Chemung Canal Trust Company (Elmira). Smith and Sartori urged New Yorkers to work closely with trusted financial advisors, particularly in these trying economic times and with uncertainty with the estate tax.
While Congress is considering several alternatives, in the absence of any action by Congress and the President, under current law the estate tax will completely disappear in 2010 and be reinstated in 2011 at the rate it was before 2001 a tax rate of 55 percent and an exemption for those with assets valued at less than $1 million at the time of their death. The current law provides for a tax rate of 45 percent, with an exemption for estates valued at less than $3.5 million.
"There are a number of proposals being circulated in Congress by Democrats and Republicans but until consensus is reached and a bill is passed and signed into law by the President, New Yorkers and all Americans may very well have to make important financial decisions for themselves and their families without fully understanding the long term implications of their decisions," said Smith. "Whether Congress acts on a multi-year plan or a one-year extension of the current law, it is clear that many New York families and small businesses will be affected by decisions made by lawmakers in Washington."
Sartori noted that since early this year, the President called for and his budget reflected the continuation of the estate tax at 2009 levels, rather than seeing it phased out in 2010 as current law anticipates.
"Uncertainty is the exact opposite of what consumers seek, yet from the national economy to the state economy and from how budget negotiations in Albany and Washington will impact their finances, New Yorkers across our state are living in a world of increasing financial uncertainty," Sartori said.
"While financial planners face the same uncertainties and the good ones do not pretend to have all the answers, trusted financial planners can help individuals, families and small business owners more calmly and steadily navigate these turbulent financial waters," Sartori said.
"Reaching long-range financial goals does not just happen, it takes hard work and getting the best information available to help make these important decisions," Smith said. "Finding a financial advisor you trust will make getting the information and applying that information to your individual needs and circumstances much easier, helping you to reach your long term goals."