It’s the season of giving, and because the estate tax repeal is still in place in 2010, you can gift your loved ones lower estate taxes. The current tax rules mean that no estate taxes will be applied to people who die in 2010. The estate tax laws that were passed in 2001 are still in place in 2010, but those will expire at the end of this year. No one knows what the new tax rates are going to be next year. While you may not be able to predict what will happen in 2011, you can make cash gifts to your grandchildren and great-grandchildren this year to reduce the size of your estate and taxes.

For instance, you can gift your grandchildren up to $13,000. These can be gifted to a number of people, and the gift is not taxable. However, you can gift only up to $13,000 to one person.

2010 is also the right time to gift real estate. For instance, there is now an exemption of $1 million in place. You can use the exemption to gift property to your grandchildren or other heirs right now, rather than letting it pass on to them after you. The real estate gift will still be eligible for a 35% gift tax. However, consider that the gift tax rate could possibly jump to 55% in 2011. In any case, California estate planning attorneys don't expect your gift tax rate to drop below 35% next year.

Obviously, there's no way to accurately predict what the federal government will do in 2011. It's very important to consider your options, and speak to a California estate planning lawyer before you make decisions about your estate. About one thing there is no doubt - 2010 is a very good year for estate planning purposes, and you must take full advantage of this.