When I first started conducting a substantial amount of estate planning, it was during the dot-com era when the estate tax exemption was quite a bit lower. In 1998 it was just $625,000 and it finally crept up to one million dollars by 2002.

Many dot com executives in start-up companies were given stock options and life insurance in lieu of good executive level salaries. Hope and speculation were on the rise. I was doing a lot of bypass trusts those days as were many other estate attorneys. Today the landscape has changed dramatically. On January 1, 2013, Congress passed the American Tax Relief Act of 2012 (“ATRA”) which was signed into law the next day. So now, in 2014, every person may leave or give away up to $5.34 million without owing any estate tax. The vast majority of estates therefore, will not owe federal estate tax. The exemption amount is indexed for inflation each year. Unlike prior legislation, there is no sunset provision. The exemption will stay in place unless Congress repeals it and it is indexed for inflation. Additionally, spouses can combine their estate tax exemptions, effectively letting married couples give away or leave more than $10 million without owing tax (provided an estate return is filed when the first spouse dies and the elections are taken.) That said, there is still a need for good estate planning and the careful use of trusts.

As I have often told clients, there are many considerations beyond estate tax avoidance. There are still income tax ramifications to be aware of but perhaps, more important, are other significant life choices.

First, all people with minor children should at least have a will with a guardianship provision naming a guardian and requesting the appointment of the guardian should the unthinkable ever happen to them. The specter of surviving relatives arguing or (god forbid) litigating over where your children should go in the event of your untimely death is unsettling. Then, while what most of us have in common is that we will pay no federal estate tax, similarities end there. Many states have their own estate and inheritance taxes, although Virginia does not.

Additionally, our families are unique and special. This is true today more than ever. For example, the rate of divorce continues to be high and blended families are common. When each spouse brings children from another marriage into a new marriage, each one may want to make certain that, in the event he or she dies before the other, that his or her children will receive the assets/he intended them to receive and not “trust” the other spouse to “just do the right thing.” Additionally, what if a person believes his or her spouse may not be capable of managing money? As grim as it sounds, trusts can provide a degree of security and control beyond death.

There may also be questions of control of assets for a child who may be less than careful or responsible. There are also concerns about asset protection or taking care of a disabled family member.

Charitable giving and leaving a legacy is also important to many people. If someone wanted to have an impact and express his or her values during life, charitable trusts are an effective way to see to it that such positive effects continue after the person has passed on.

Not one size fits all. Each one of us is unique and special. With careful planning we can make certain those attributes are remembered and that which is important to us will continue to be cared for after we can no longer be here in person.