With changes to the federal estate tax looming, it appears there is no better time for California families to begin estate planning and to have a solid understanding of the laws and how they might affect a family's estate. For instance, this year, many couples do not owe federal estates taxes, but some experts are recommending that they file a tax return anyway.

This year, the fewest number of estates in more than 75 years will owe federal estate taxes. However, people are encouraged to file a tax return even if they owe nothing, all thanks to the portability provision in the 2010 Tax Relief Unemployment Insurance Reauthorization and Job Creation Act.

The portability provision allows surviving spouses to claim unused exemptions, but they must do so on time otherwise they will lose the exemption completely. Currently, surviving spouses must file the estate tax return within nine months of their spouse's death. Taking advantage of a spouse's unclaimed exemptions can end up saving people thousands of dollars.

Right now, the 2011 federal estate tax exemption sits at $5 million, but that could be changing in the very near future. In 2013, the tax exemption is scheduled to drop to $1 million. The president and Congress might not let that happen, but the president previously outlined a plan that would set the federal estate tax exemption at $3.5 million.

Estate planning is critical for families to preserve their valuable assets and to provide a solid future for their heirs. California residents thinking to begin estate planning would likely benefit from working with an experienced attorney. Estate planning can be complicated at times, but an attorney who understands the laws and procedures as they relate to estate planning can help individuals and families plan a solid future.

Source: Forbes, "The Coming Flood Of Estate Tax Returns," Roberton Williams, Nov. 30, 2011