Help pack a million meals for struggling seniors on Sept. 11. Volunteer today



Contests and

Driver Safety

Piggy bank on the road - AARP Driver Safety

Take the new AARP Smart Driver Course!

Happy African American couple

AARP Books

Visit the Books Section

Enjoy titles on retirement, Social Security, and becoming debt-free.

Jobs You Might Like

most popular


A To-Do List for Estate Planning

Get ready for possible changes in 2013

Three generations looking at family photos - what you can do to prepare a solid estate.

Take the time to review your options before estate tax rates change in 2013. — LWA/Getty Images

In recent years, Congress hasn't made estate planning any easier with its ping-pong approach to the estate tax.

The first — and most vexing — thing you need to know is that federal estate tax rates are slated to change again in 2013, unless Congress decides otherwise. That's little comfort for estate planners, who in recent years have been whipsawed by a federal rate that changed annually, going to zero in 2010 and then moving upward again this year.

See also: Contesting a will.

Yet there's much you can do to streamline one of the most difficult financial planning decisions of your life. If you break things down into pieces, estate planning becomes a lot less intimidating.

The good news is that until Jan. 1, 2013, the amount of your estate exempted from federal tax is $5 million for individuals, $10 million for couples. You can also make up to $5 million in gifts ($10 million per couple) before paying a gift tax.

Who can say what will come with 2013? But at the very least you should start reviewing your options now to determine the best tax strategy for you.

Here are some essentials to consider:

  • Professional advice. Find a qualified estate planning professional who will listen to you and craft a plan that works for you and your family. That's the best assurance that your intentions will be honored.
  • Health care power of attorney. Before you make the big decisions about who will get your estate, you need to make other choices about who will represent your interests with the doctors if you become incapacitated. You do this with a health care power of attorney. You also need a living will, which tells medical staff what to do in the event you're placed on life support.
  • Financial power of attorney. This document is similar to a health care power of attorney, only it appoints someone to handle your financial affairs. This person should not only be trustworthy, but also understand something about finance or investing. This document may also be called a "property" power of attorney.
  • Wills and trusts. Wills are essential, simple documents that everyone should have. Trusts can be drafted in addition to wills and serve more complex estate-planning needs. Property and other assets can be placed in the trust to shield them from taxes and from probate, the lengthy and expensive court process by which wills are executed. Instead, a trustee is appointed to manage the trust. That will simplify things once you or your spouse die.
  • Gifts that can reduce your estate. Although the gift-tax exemption may change in 2013, couples can for now give away up to $10 million without paying federal gift tax. Talk to your estate planner about how gifts might reduce the value of your estate, and therefore the tax paid on it.

    "This is for extra money you don't need to live on," says Rial Moulton, an attorney and financial planner with Retirement and Tax Planning Specialists in Spokane, Wash. "Now is a window of opportunity to get chunks of assets out of your estate."

Next: Donating money from your estate. >>

Topic Alerts

You can get weekly email alerts on the topics below. Just click “Follow.”

Manage Alerts


Please wait...

progress bar, please wait

Tell Us WhatYou Think

Please leave your comment below.


The Cheap Life

Jeff Yeager Cheap Life Ultimate Cheapskate AARP YouTube web series save money

Catch the latest episode of The Cheap Life starring Jeff Yeager, AARP's Ultimate Cheapskate. Watch

Discounts & Benefits

From companies that meet the high standards of service and quality set by AARP.

Member Benefits HomeServe

Members can protect their homes with comprehensive repair plans from HomeServe.

AARP Credit card from Chase

Members can get cash back rewards on purchases with the AARP® Credit Card from Chase.

Woman holding smartphone in city, Google map tool

Members can find discounts on the go via the AARP® Member Advantages Offer Finder app.

Member Benefits

Join or renew today! AARP members receive exclusive member benefits & affect social change.

Rewards for Good

Your Points Balance:

Learn More

Earn points for completing free online activities designed to enrich your life.

Find more ways to earn points

Redeem your points to save on merchandise, travel, and more.

Find more ways to redeem points


Advance your skills. Transform your career.

Explore your learning possibilities.