Estate planners: are you ready for Obamacare?

So how will the Patient Protection and Affordable Care Act (“ACA”) affect your estate planning clients as the rollout rolls along? Well, there is some bad news and some good news, write Steve Buttice and Darrell Dies in the latest ISBA Trusts & Estates newsletter.

Or, put another way, there are some tax increases and tax reductions. That means it's time to look at Obamacare-driven estate planning opportunities if you haven't already done so, especially for high-earning clients.

For example, a couple of new Medicare taxes kick in this year for high earners, one on earned income and one on investment income. As for earned income, there's not much your clients can do except "earn less," Buttice and Dies say. But for investment income, they write, "savvy estate planners might consider advising clients, in tandem with their investment advisors, to consider using Roth IRAs which do not give off taxable income, installment sales which spread out taxable income, contributions to charitable remainder trusts which act to defer taxable income or reduce net investment income with tax exempt bonds or consider the viability of using other insurance products to avoid the new tax." Read their article.