After the quick-succession deaths of Ed McMahon and Farah Fawcett followed by the sudden death of Michael Jackson, 2009 is sure to be remembered as a notable year for celebrity mortality.

For the families of each of these stars dealing with the financial fallout of their deaths could be challenging. Reports indicate that Michael Jackson was some $400 million in debt, and Ed McMahon had a well-publicized foreclosure and mounting debts. The moral: Even the seemingly wealthiest and most successful among us are not immune from money problems.

But where death is concerned, 2009 is notable for another reason. To be brutally blunt, the death of a wealthy person in 2009 is a less taxing event than dying in 2008. That's because effective Jan. 1, the federal estate-tax exemption jumped to $3.5 million, up from $2 million last year. So you can now shelter up to $1.5 million more ($3 million more if you're married) from any federal estate-tax hit than if you had passed away in 2008. Yup, this is morbid. But it's favorable news to heirs of well-off people who die this year.

That said, you need to be careful. This leap in the exemption could throw your estate plan out of whack. Without a careful review of your arrangements, part of your estate could be allocated in ways you didn't intend.

But before I go any further, let me just make a plea to all of you who took a look at that $3.5 million exemption figure and decided this article definitely does not apply to you. Sure, $3.5 million sounds like an awful lot of money. But you might be a lot wealthier than you think. For federal estate-tax purposes, your estate includes your home (or homes), cars, retirement accounts, taxable investment accounts, collectibles and so forth.

Perhaps more important, the taxable value of your estate also includes death benefits from insurance policies on your life that you are considered to own. (If you have the power to change beneficiaries or coverage amounts, you own the policy.) With life-insurance coverage thrown into the mix, the odds are much higher that your estate exceeds the seemingly generous $3.5 million exemption. So if you don't already have an estate tax-savings strategy in place, now may be the time to create one. Consider the recent celebrity deaths to be fair warning that waiting is not a good idea. For assistance in getting started, see our estate planning section.

For those who already have an existing estate plan, here's how the larger 2009 exemption could affect you along with some advice on how to avoid potential danger zones.

Married? Your May Be Funneling Too Much or Not Enough Into Your Bypass Trust

If you're married, your current estate plan may include a bypass trust arrangement. This common estate-planning tool is used to ensure that both you and your spouse take full advantage of your respective estate-tax exemptions.

The way most plans work is that an amount equal to the current federal estate-tax exemption automatically goes to a bypass trust when the first spouse dies. Typically, the trust beneficiaries are the children of that spouse.

Since you name the beneficiaries of the bypass trust, the amount used to fund the trust is included in the value of your estate for federal estate-tax purposes if you die before your spouse. However, that amount is then fully sheltered by your estate-tax exemption. The result: no federal estate-tax bill. So far, so good.

But here's the rub: Many wills don't state an actual dollar figure for the amount of assets that will be used to fund the bypass trust. Instead, the amount is stated to be equal to current federal estate tax exemption whatever that happens to be at the time of death. But with the exemption for 2009 jumping to $3.5 million (from $2 million last year), your bypass trust could wind up with a lot more money than you intended and your spouse could wind up with a lot less.

For example, say you have a $4 million estate. Your will stipulates that a bypass trust is to be funded with an amount equal to the current federal estate-tax exemption. So if you pass away, a whopping $3.5 million would automatically funnel into the trust. Your spouse would get the remainder of your estate, which would be only $500,000. Had you died in 2008, your spouse would have received $2 million.

While your spouse has the right to dip into the bypass trust to meet reasonable financial needs, it doesn't make sense to leave the window open for future problems when it's so easy to close it. Worst case scenario: Your spouse gets into a legal hassle with your kids regarding what's "reasonable." The solution here is simply to revise your will to stipulate a specific dollar figure to fund the bypass trust should you die before your spouse.

If your will already specifies a specific dollar amount to fund the bypass trust, please make sure you don't have the opposite problem: too little money going into the trust. Say you have a $4 million estate. Your will stipulates that if you die before your spouse, $2 million (the old exemption amount for 2006-08) would automatically flow into the trust. Your spouse would get the remaining $2 million. But she may not need or want all that money if she has a substantial estate in her own right. While the $2 million figure made sense before 2009, you can now put more into the bypass trust and thereby take advantage of this year's larger $3.5 million exemption.

The solution in this case is to amend your will so that the bypass trust will be funded with the upgraded $3.5 million amount if you die before your spouse. Under the amended plan, your kids would get $3.5 million instead of just $2 million free of any federal estate-tax hit. Plus, your full $3.5 million exemption would be utilized instead of partially going to waste.

Unmarried? You May Be Leaving Too Much to Charity

If you're single and your estate is worth more than $3.5 million, you need to do some planning that is, unless you want Uncle Sam to be one of your beneficiaries.

One way to tackle this problem is to leave just enough to charity to reduce your taxable estate to the magic $3.5 million figure. That way, your $3.5 million exemption would wipe out any federal estate tax bill. (Note: Your existing will might call for leaving just enough to charity to reduce your estate to the old law exemption amount of $2 million, so you may want to make an adjustment.)

The solution? You can now leave $1.5 million more to friends and relatives (and $1.5 million less to charity) while still leaving zero to the U.S. Treasury. I'm not advising you to leave less to charity. I'm just letting you know that you now have the option of leaving more to friends and relatives without triggering a federal estate tax bill.

The Current Shape of the Federal Estate Tax

The federal estate tax will remain in existence until next year, 2010, when it's scheduled to be repealed but just for that one year. Current law provides that the tax will come back with a vengeance in 2011 when the exemption is scheduled to be only $1 million and the maximum tax rate is scheduled to be a whopping 55%. At least, that's how the law reads today. However, nobody believes that we will see the repeal that was promised for next year. I also don't believe that the estate tax rules for 2011 and beyond will be allowed to turn so nasty. The probable outcome is that Congress will decide later this year to continue the estate tax through 2010 and beyond with a permanent exemption amount of around the current 3.5 million figure. Stay tuned: We will tell you what you need to know when changes occur.

In any case, here's a breakdown of the current rules: