ExecPan Express Updates Its Personal Financial Planning Software to Incorporate Changes to the Estate Tax Laws for 2011

PRINCETON, NJ, February 17, 2011 (Press-News.org) For business owners, wealthy individuals and financial advisors alike, the new estate tax law changes at first appear to provide major financial benefits. However the bigger picture is that the temporary nature of these benefits will mean potentially more complex planning strategies. ExecPlan Express financial planning software has updated their software for 2011 to include all of the new tax law changes including the temporary alterations to the estate tax law to help guide financial planning professionals through these new changes. The most widely reported of all these changes was the increase to the unified tax credit (UTC) from the equivalent of $1,000,000 to $5,000,000. More importantly, the new law allows the passing of any unused portion of a spouse's UTC to the surviving spouse. This means if a married couple uses a simple will that allows for a tax free passing all of their assets to their surviving spouse, then the surviving spouse upon their death will be able to exempt up to $10,000,000. This change alone has significant impact, both good and bad. The upside is that this eliminates the need for the common A/B trusts of the past, allowing the surviving spouse complete control of all of the married couple's assets. The downside is that this may result in many wealthy couples forgoing the need to create or update their current wills with important provisions that would help in the orderly transfer and protection of their estate to their heirs such as asset protection trusts, special needs trusts, and health and living wills.

The new law also includes a raise in the lifetime gifting of $5,000,000 and a lower estate tax rate to 35% from a previous top rate of 55%. This is where some of the financial planning analysis becomes more challenging and the use of a tax and financial planning software becomes essential. In the past, many estate planning strategies were built around the use of life insurance outside of the estate. In most of these cases this involved liquidation of investment assets to fund life insurance policies outside of the estate such as in an ILIT (irrevocable life insurance trust). With the previous tax structure the cost of the insurance and the taxes owed on the liquidation of investments was often much lower than the actual 55% estate tax exposure making this strategy cost effective. However, now with the lower rate of 35%, this avenue of financial planning may no longer make sense. This is because the cost of liquidating highly appreciated assets is a minimum of 15% in income taxes. Add in the cost of insurance and loss of appreciation from the liquidated assets, and you could have an estate planning strategy that cost more than simply paying the new lower 35% tax. In the past, because the estate tax was so high, it was easy to implement insurance based strategies without any real long term analysis. Now, the only way to proper analysis what makes sense is to use a personal financial planning software that incorporates an estate tax analysis. "Our professional financial planning software is unique in the market place at the under $400 price range because we do an actual federal income tax analysis as well as a net worth and cash flow projection on a year by year basis" explains Robert Fourman, Director of Marketing and Sales. "This allows estate planers and financial advisors to look at what the estate tax exposure would be and then easily develop a comprehensive financial plan that integrates the most cost effective estate planning strategy by analyzing the long term impact on an individual's net worth and retirement planning goals."

Those of more a modest means who currently have no concern about the estate tax and are only concerned about their personal retirement planning objectives should still be aware that the estate tax fix is only for two years. Then it returns to the $1,000,000 exemption amount exposing a significantly larger number of people to its tax burden. With its intuitive and flexible design, ExecPlan Express financial planning software will also allow anyone to look at the estate tax with the assumption that it returns to the $1,000,000 levels. For professional financial advisors or consumers who are interested on how all these changes will impact them, they can obtain a free 30 day unrestricted trial version of ExecPlan Express at www.execplanexpress.com. Visitors to the website will also find access to free online financial calculators, be able to obtain detailed sample reports, or can spend time reviewing online tutorials.

Sawhney Systems is a provided of comprehensive financial planning software for the professional financial advisor. For information on our products ExecPlan and ExecPlan Express please contact us at (800)850-8444.