Friday, October 05, 2007

Hartford Reports Fed Est Tax Attitudes

On October 4, 2007, The Hartford Financial Services Group, Inc. issued a Press Release entitled "The Estate Tax Conundrum: A New Study by The Hartford Explores Attitudes of Affluent Americans on Transferring Wealth to the Next Generation".

It notes: "Despite worries about the bite taxes will take, many Americans with significant savings have not taken adequate steps to plan their estate."

In a new survey from The Hartford Financial Services Group, Inc. (NYSE: HIG), affluent Americans, especially those with more than $2 million in net worth, say they are more concerned than just a year ago about their families having to surrender significant chunks of an estate to federal taxes.

Despite those concerns, however, nearly 40 percent say they have not taken any steps to plan their estates and one in three surveyed say they don't know where to start. * * *
The Press Release reports: In August of this year, researchers for The Hartford gathered information about views on the estate tax from 750 adults with annual household incomes of $150,000 or more (70% had more than $1 million; 36% had more than $2 million in net worth).

The results revealed concerns by the polled audience:

Concern over the estate tax is rising, perhaps in connection with uncertainty over national elections now 14 months away.

Just under half of those surveyed said they were more concerned about the estate tax than a year ago. The concerns, the research found, rose in proportion to the respondents' savings.

Compared to the sample average of 49 percent who expressed greater concern about the estate tax, 73 percent of Americans with $5 million or more in assets, and 56 percent of those with more than $2 million in assets confessed that their fears were rising, the survey found.

The reported top causes of concern were:

  • Increase in their net worth (65 percent)
  • Growing federal budget deficit that might imperil any estate tax cuts (47 percent)
  • Sense that the new Congress is less likely to repeal or reform the tax (41 percent)
Of those surveyed who had engaged in some estate planning, traditional approaches & tools appeared favored:
  • 81 percent had written a will
  • 68 percent had talked to family members about their intentions
  • 63 percent had created a Power of Attorney or Living Will
  • 51 percent had created a Living Trust
  • 40 percent had purchased life insurance for estate liquidity or to pay estate taxes
  • 22 percent had created an Irrevocable Life Insurance Trust
The results reinforced the role of professional advisors in addressing plans to address federal estate tax concerns:
Of the more than half of respondents who had begun estate planning,
  • 74 percent worked with an attorney,
  • 47 percent worked with an accountant and
  • 28 percent worked with an insurance agent.
Smith said consulting a professional is a good start.
The Press Release was also posted online by Yahoo Business (here), Trading Markets (here), and MSN Money Central (here), among others. It should be consulted for details.