When Congress agreed to allow a $5 million individual exemption for the federal estate tax, it caused a ripple effect. A survey by WealthCounsel LLC reported over 30 percent of surveyed lawyers saw clients worry less about estate taxes and more about other after-death issues.

Other estate distribution concerns took precedence over tax issues with clients. Some clients sought to quell expected family arguments or keep an estate out of probate. Other estate plans focused on protecting after-death assets from mismanagement by unreliable or unskilled heirs.

The $5 million exemption created a safety net for many clients in 2011 and 2012, whose estates were not expected to exceed the generous, untaxed amount. Wealthy clients seemed to relax in the comfort of a reduced 35 percent tax rate for estates that surpassed the $5 million mark.

Specialists urge high-asset clients, who have not set up estate plans to take full advantage of federal tax breaks during the months remaining this year. The liberal $5 million ceiling and 35 percent tax rate will change in 2013, unless Congress chooses to change laws governing estate taxes. The tax exemption is expected to drop back next year to $1 million for individuals while the tax rate jumps to 55 percent.

Estate planning attorneys expect Congress to address the estate tax issue, but are uncertain what legislators will do.

Expert advisors are crafting estate plans that can ride whatever changes are made for the future at the federal tax level. Flexibility is being built into estate plans through the use of elastic formulas rather than exact numbers.

Attorneys are maximizing client options in estate plans by taking advantage of lower interest rates and current federal tax rates for estates, gift-giving and charitable contributions.

Source: investmentnews.com, "Estate tax lull may trap wealthy," Liz Skinner, Jan. 15, 2012