The uncertainty of whether the sunset provision will come into play, plus the two presidential elections before 2010, and Congress' continual debate over repealing the federal state tax, in addition to not knowing the date of our death makes estate planning difficult, but not impossible.

     Disclaimer planning can benefit you in light of the ever-changing legislative landscape. Disclaimers have been proven to be an effective method by which credit shelter trusts can accomplish significant estate tax savings, without unintentionally impoverishing your surviving spouse. A credit shelter trust is a useful tool to effectively utilize both spouses' estate tax exemptions. However, in light of the phased-out estate tax, credit shelter trusts are being rewritten with care to minimize the risk of undesirable results which cannot be remedied after death. Historically, the determined notion of the amount used to fund a credit shelter trust was accomplished through use of a formula; but, given the fluctuation of federal estate tax exemption levels, mandatory funding has the potential to result in unintended and harmful consequences.

      The use of a disclaimer allows a surviving spouse to disclaim all or part of his or her spouse's estate to take advantage of the deceased spouse's estate tax exemption. It is important to understand that a surviving spouse can disclaim property and still benefit from such property. A will or living trust may state that if your spouse disclaims any property he or she is entitled to inherit, the disclaimed property shall pass to a credit shelter trust from which your spouse may benefit during his or her lifetime. Therefore, the use of disclaimer planning provides a surviving spouse with the opportunity to make decisions after the death of the first spouse, when all of the facts are known; the survivor will then know the applicable estate tax exemption and the value of the decedent's estate.