As you may know, the estate tax situation in 2010 has raised several important questions about the validity of some existing estate plans. At the moment, the estate tax itself has disappeared. It ceased to exist as of Jan. 1, 2010, under a law written in 2001. However, as you may imagine, some apparently unintended consequences have arisen, because the very lack of limits calls into question the value of formula clauses that many estate plans and wills use to determine how an estate will be distributed. Such clauses often refer to amounts “up to the legal limit.”

For now, there are no legal limits as to what can be inherited tax-free, so estate plans dependent on those limiting clauses may not work as intended to distribute an estate as planned, say between the surviving spouse and children.

Also, as the estate tax ceiling disappeared, so did the step-up-in-basis rule for inherited property. Under that rule, those inheriting property (or stock or other assets) were assumed to have acquired it at its current value, thus avoiding any immediate tax consequences. Now, anyone inheriting property may be assumed to have acquired the property at its original cost, which could lead to major capital gains or income tax consequences.

There is plenty of noise in Washington about Congress reinstating the 2009 rules (a tax-free ceiling of $3.5 million with any remainder taxed at a 45 percent rate) retroactively for all of 2010 — but that doesn’t seem imminent. Also, unless there is new legislation, the old 2001 limits are set to reappear in 2011 — and that will impose a $1 million exemption limit and a 55 percent gift tax rate.

As you can imagine, there is no one-size-fits-all solution for the current dilemma. I wanted to let you know that I’m monitoring the situation as it evolves. In the meantime, if you have concerns about your existing estate plan, you should consult a tax professional about your specific situation. I’ll be happy to review the situation with you or suggest a legal adviser if you believe your estate planning documents should be redrafted.

Nancy L. Schultz is an investment adviser representative affiliated with Raymond James Financial Services.