Whether you're a Republican, Democrat or somewhere in the middle, you pay your representatives and senators in Washington to take action on important issues. But in our nation's capital, politics often blocks needed action. This is precisely what's happened in the case of estate tax and gift tax reform.

The recent death of George Steinbrenner, longtime owner of the New York Yankees, called public attention to congressional inaction and the benefits of this inaction for inheritors of wealth. Mr. Steinbrenner's wealth has likely avoided taxation under the current federal estate tax law because he died in 2010. And as reported by The Associated Press, his death this year likely saves his heirs "enough money to field an entire team of Alex Rodriguezes."

Few, if any, of us thought Congress would allow the federal estate tax to expire on Jan. 1, 2010. Yet, more than eight months later, there is no definite answer on how the estate tax rules will change. More important, whether Congress does anything or not, we are in for more big changes by the end of this year.

As with any significant change, this creates corresponding, significant opportunities that may be less than obvious. They're not the potential savings after death. After all, no one would consider avoiding the estate tax by dying in 2010 an opportunity.

The Bush tax cuts of years ago that repealed the estate tax in 2010 also made significant changes to the Gift and Generation Skipping Transfer taxes. At the beginning of 2010, the top federal gift-tax rate fell to 35 percent. In recent years, this rate was once as high as 55 percent, and will, in all likelihood, increase significantly at the end of 2010, whether or not Congress passes reform legislation.

What's more, the effective top gift-tax rate can be reduced even further to below 30 percent in some circumstances. This situation presents a significant, yet quickly closing, window of opportunity for prudent estate planning.

Also, on Jan. 1, 2010, the Generation Skipping Transfer Tax was completely repealed. This tax normally applies to the transfer of assets that skip one or more generations and comes into play in addition to any other gift or estate tax. The tax rate now sits at 0 percent, but was previously and may likely become 55 percent or more. The current nonexistence of the tax presents a huge opportunity for families trying to manage intragenerational wealth.

If and when Congress reaches an agreement on estate-tax reform, it will likely shut down some highly effective strategies permitted under the current rules.

For example, a Grantor Retained Annuity Trust can be used to make large financial gifts to family members without paying a U.S. gift tax. Under current federal regulations, a GRAT can achieve this tax benefit by capitalizing on short-term investment market fluctuations with little downside to the creator of the trust.

It is likely that many of the upcoming changes in the estate and gift rules will take a lot of people by surprise. For example, an individual with assets of $2 million, who previously thought the federal estate tax was of no concern, may need to attend to estate planning beyond a traditional will. Otherwise, his or her heirs could be in for an unpleasant surprise in the future.

Surrounded by uncertainty, most people find it difficult to take action. Avoiding action is precisely what Congress has done, creating the current disarray in the estate-tax landscape.

It is time for our elected officials to put politicking aside and come to an agreement before the pendulum swings to the other extreme on Jan. 1, 2011.

But until that happens, it is imperative for individuals to take advantage of the estate-planning opportunities now, without hesitation before they disappear.

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