DM: “Probate imposes an indirect tax on assets held in your name at your death.  Avoiding probate is generally not difficult, and helps maximize the after-tax legacy you leave your family. Fortunately, you can avoid it by titling assets with beneficiary designations oroutside your name entirely (through a living trust).  The trust bypasses the delays, expense, and publicity of probate because trust assets are no longer titled in your name.”

AC: “As of Jan 1, 2013, the federal estate tax exclusion is scheduled to revert to $1.0 million.  This means that if you die and leave assets valued at more than this amount, federal estate tax will be imposed. The maximum federal rate will be 55%.  This is on top of state estate tax that may be imposed depending upon where you live. Anyone with assets over $1.0 million should get busy planning during 2012.  This will allow you to take advantage of the temporary $5.0 million exclusion from federal gift tax.  For example, if I have $5.0 million, I can gift $4.0 million this year and it should be outside of my gross estate upon my death.  My remaining $1.0 million will be covered by the estate tax exclusion of $1.0.”

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