Subscribe to our Newsletter

Click here to learn more


Burlington, VT office 802.540.0529
Hanover, NH office 603.643.6072
Rutland, VT office 802.773.3822
Woodstock, VT office 802.457.9492

December 9, 2010 Newsletter Archive

Happy Holidays!

At Melendy Moritz we are wrapping up year end planning, wrapping our minds around the new estate tax, and wrapping gifts to give our loved ones. We hope that the light of the season brings you great warmth, and inspires you to reflect on your personal successes and challenges in 2010 and set new goals for 2011.

Highlights of the New Federal Estate Tax

With the ink on the law barely dry we wanted to give you the highlights of the recently passed federal estate tax law:

    1. Effective January 1, 2010, the estate tax law was reinstated with a $5 million dollar exemption amount and a top estate tax rate of 35%. With the estate tax in place the old income tax basis step-up rules apply as well. However, for this year only (2010), there is the opportunity for executors of decedent's dying this year to choose no estate tax and be subject to the modified carryover income tax basis under which you can elect to allocate up to $1.3 million of income tax basis increase among the decedent's assets ($3 million in the case of surviving spouses). There is not much doubt that the George Steinbrenner estate will opt for no estate tax even with a lower estate tax rate of 35%!

    2. Effective January 1, 2011, for 2011 and 2012, the estate tax, gift and generation-skipping tax structure is back in full with a $5 million dollar exemption amount (indexed to inflation beginning 2012) and a top estate tax rate and generation skipping tax rate of 35%.

    3. Unlike prior estate tax structure, the new estate tax law incorporates a "portability" feature. Under this feature effective for estates of decedents dying next year an executor can transfer the unused exemption amount of the first spouse to die to the surviving spouse.

      Be Aware! This feature significantly alters the classic family or credit shelter trust planning arrangement of the past actually making such planning disadvantageous.

      We will have more information on this component of the law in near future as it is the one aspect of the law requiring some timely action to avoid adverse effects of this new law.

    4. Going back to the good times of the past, effective January 1, 2011, the estate and gift tax system will be unified again. Prior to 2004, an individual had a set estate and gift tax exemption amount and the person could choose to use that amount all at death, or all during lifetime, or a combination thereof. Beginning in 2004, the estate tax exemption amount was higher than the gift tax exemption amount, so potentially you could owe a gift tax for lifetime gifting, even though if you were transferring assets at death there would be no estate tax. Now we are now back to allowing someone to use the exemption fully either at death or through lifetime giving or a combination.

In future newsletters we will be following up with more details of the new law, highlighting estate planning pitfalls and opportunities.


Notes on the Planful Path™: Not Your Parents' New Year Resolution

Pledge to Live Your Well Lived Life on the Planful Path™

Planful Path

"By failing to prepare, you are preparing to fail."
Benjamin Franklin

This month we are hurtling our way into the next calendar year with its typical media trappings — the year in review, the person of the year, the high and lowlights of 2010 — all call into relief the personal question; what did I do in 2010? This is how resolutions begin — with a little bit of taking stock. Unfortunately, they end much like the past year itself, with the bang of the champagne cork, and the morning after, tired recognition that a new year is upon us, and we must "get back to the grind."

Fortunately, we don't think that 2011, or for that matter, life itself, is a grind, and we hope that you don't either. But resolutions really are the stuff of legend. Why can't we stick to our resolutions? Mainly because we bite off massive chunks of resolve that we later find very difficult to swallow.

This year begin with a simpler plan. Pledge to go small and simple. We will talk about some ways in which to do so below.

Focus is Key

Have you ever noticed a cat on the hunt? A cat is able to sit for remarkably long periods of time focusing on one spot, completely fixated on her prey. Focus is a key component in achieving an objective. However, on what to focus is often the more complex question.

Life Roles

We all play a multitude of roles in our lives. We are parents/grandparents, spouses/partners, friends and volunteers, we have our careers and we like to have fun. With our many hats, it is often a challenge just to get through our day to day routines, let alone reflect on improving any aspect of our lives.

To Get Small, Start with the Big Picture

To reflect on your past year in a meaningful way, it may be beneficial to take each role you play and rate your personal satisfaction with it. Consider your successes and challenges with each role. You should only rate your personal satisfaction, and, very importantly, do not be harshly critical or too self reflective about this exercise. Instead, work mainly from intuition. Your gut feelings will reveal to you a lot about yourself.

For example, in your relationship with your significant other you may have finally taken that vacation just the two of you had been planning. You can count that as a success. Or, if you planned it, but it did not materialize for some reason, that is an on-going challenge.


Once you've completed this exercise, you will probably wonder how to use it effectively. Review your list and identify in which areas you accomplished the most successes and which were most challenging. Are there areas that you would like to change, and if so, which? Use your intuition to develop the priority.

Now that you have your list of priorities, choose one specific area on which to focus.

Why only one? In order to focus, it is beneficial to simplify. The hunting cat is not focused on catching ten mice, or even two. Most often, she will focus on one mouse at a time, and use all of her skills to catch her prey. When she has accomplished this task, she will be satisfied and move on to another. In much the same way, you can focus on your first priority, and once you meet your goal you may see successes in other aspects of your life.

Focus Further

To help you focus even further ask yourself whether there are nagging issues you need to put behind you, are there obstacles that you have placed in meeting your goals, and if so, how will you resolve to move those road blocks? Is there an area in which you want a breakthrough, is there a life role that you seek to master, and is there an area in your life that you see as such a drain you are willing to let it go?

Now make a pledge to review your priorities throughout the year, taking stock that small goals are being achieved. By doing so, you will more likely ensure that you are making choices that are in line with your overall values, moving forward to meet your desired outcomes, and probably improve your other life roles as well.

We hope that you all take time to reflect on the successes and challenges of this past year and make a pledge to enhance one small area of your life. For more information on setting and achieving your life goals on the Planful Path™ call Melendy Moritz at 802/457-9492.

Melendy Moritz PLLC is a client centered boutique firm. We focus on your unique needs by providing the individualized legal counseling and advising tailored to your specific situation.

We concentrate on the planning that matters to you.
Call us at 603.643.6072 or 802.457.9492


Return to Newsletter Archives