Tax Changes Bringing Hard Money Choices.

For Americans with significant sums of money to manage, the next few years are going to feel like a roll of the dice. Those most vexed will be the older generation and their adult children.

The new tax law presents them with puzzles designed to raise their anxiety levels. Which parts of the law will survive and which won't? How do you plan for phased-in changes every year, when the experts are more uncertain than I've ever seen them and mistakes will be expensive for your heirs?

One question is how to handle an Individual Retirement Account that contains an important amount of money.

1. Split your IRA into two parts -- one for a spouse, one for the children or even grandchildren. This year, the children's IRA could contain up to $675,000, the current amount that passes free of estate tax. Next year, $1 million can pass to heirs tax free.

2. Name both primary and secondary beneficiaries on each IRA form. If the primary beneficiary -- say, your spouse -- doesn't need the money, he or she could let it pass to the next beneficiary you named (that's a system called "disclaiming").

Another question is whether to buy life insurance to cover the possibility of owing estate taxes in the future. You don't need it -- if the estate tax truly goes away.

You don't need it anyway if there are plenty of liquid assets (stocks, bonds, cash) to pay any potential tax. It's important only for estates with illiquid assets such as a family business or major real-estate holdings.