With uncertainty as to how tax laws might change after this year, financial planners are advising families to leave their wealth to their heirs either through gifts or trusts, instead of placing their money in an estate that could be subject to high taxes. It's important to remember that there is never a wrong time to start estate planning until it is too late.

Currently, each person can transfer as much as $5.12 million without gift taxes, and many planners, including some in New York, said clients should do so now. If Congress fails to take any action by the end of this year, tax rates for gifts and estates in 2013 will revert to pre-2001 rates. That means estates and gifts exceeding $1 million could be taxed as high as 55 percent.

People with considerable personal or business assets should not wait until later in the year to see what laws Congress might enact, advisers said. With an election in November, it is unlikely that any compromises will be reached before then. Setting up trusts and other financial plans could take several months, perhaps too long to take advantage of the current laws, planners said.

Experts said each individual needs to consult with planners to draft a plan tailored to the situation. People must consider how much money they will need to live out their lives, the best way to preserve funds for their children and how to make sure a business is protected, they said.

Business owners, for example, must make sure their business plan will protect their own families as well as the company's employees and their families. Estate taxes that would adversely affect businesses might be in effect next year and could be avoided by planning now in 2012, experts cautioned.

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