With a presidential election set to happen later this year, and a polarized political climate unlike any in this country's history, Florida residents should not count on any tax relief being extended for 2013. This could have large implications for Florida residents who are working on an estate plan and trying to keep as much wealth in the family as possible.

For 2012, the gift tax and estate tax exemption is $5.12 million, meaning anything given away under that amount cannot be taxed. But that exemption will expire at the end of this year unless Congress acts, which is not guaranteed.

If no action is taken, the gift and estate tax exemption will go back to $1 million, the level it was at before the 2001 tax cuts were passed. Any gift or estate above that amount could be taxed at a rate of up to 55 percent, which no one wants to pay.

One of the best methods that one can use if they want to leave their children as much wealth as possible is to create a trust. Gift and estate taxes are filed on an individual basis, which means a couple together could protect up to $10.24 million in a trust that would be shielded from taxation.

One tax expert especially recommended that business owners make plans this year, lest the survival of a business be threatened by estate taxes. He used the example of a business owner with $4 million in assets who did no estate planning and died next year when rates will be higher and the exemption will be lower.

Experts also recommend moving quickly, waiting until the end of the year could be too late, because setting up a trust takes time, and there might not be enough.

Source: New York Times, "A Year to Stay Flexible on Tax Plans," Jan M. Rosen, Feb. 8, 2012