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Over the pained howls of liberals, Congress has increased the exemption from the federal estate tax to $5 million, leaving fewer than 4,000 families likely to be stuck paying the 35% tax in 2011. While the new estate deal expires at the end of 2012, the $5 million figure is unlikely to fall. "Rates can fluctuate, but estate tax exemptions don't get reduced," says Columbia Law School professor Michael J. Graetz, who coauthored a book on the political battle over taxing inherited wealth.

That hefty $5 million exemption, combined with a new portability provision, should allow many affluent couples to simplify their planning, leaving their assets outright to each other instead of to cumbersome bypass trusts. Portability? If a married person dies in 2011 or 2012 without using up his full $5 million exemption (amounts left to charity or a U.S. citizen spouse are estate tax free and don't count against that exemption), the unused exemption is passed to the surviving spouse. That allows a widow or widower to leave as much as $10 million free of estate tax. (No, before you entertain lurid ideas, you can't stockpile multiple spousal exemptions through serial marriages. Only what is left of your last late spouse's exemption counts.) Here's a look at what you need to know and do in 2011.

Don't ignore the basics

Whatever your age, marital status or net worth, you need a will (saying who gets your stuff); a living will (stating your wishes about end-of-life care); a health care proxy (naming someone to make medical decisions for you if you can't); and a durable power of attorney (designating someone to act on your behalf in financial and legal matters if you can't). If your situation is very simple and you are cheap, using do-it-yourself software is better than nothing. (More than half of Americans lack wills.) If you have minor or disabled children, or substantial assets, or live in a state with its own version of an estate tax, spring for a lawyer.

Review any old estate plans

"People are going to have to undo a lot of the planning that's been done,'' warns Bernard Kent, a lawyer, CPA and managing director of Telemus Capital Partners in Southfield, Mich. Example: Many couples have old wills designed mainly to preserve the estate tax exemption of the first spouse to die, something the law now does. Under these old "formula" wills, when the first spouse dies assets equal to his or her federal estate exemption go into a "bypass trust" for their kids. The surviving spouse has access to the trust's earnings and, if need be, principal, but what's in the trust "bypasses" the survivor's estate. Problem is, with the exemption jumping to $5 million (it was only $2 million in 2008) the survivor could be left with nothing outside the trust. Moreover, individual retirement accounts, primary residences and other assets that shouldn't be in the trust for income tax reasons could be automatically sucked in, warns Portland, Ore. estate lawyer Marsha Murray-Lusby.

But don't be too quick to write off all trusts, she adds. Couples in a second marriage will want a fixed amount in a bypass trust to make sure kids from their first marriages aren't stiffed. A bypass trust can also provide valuable asset protection--a consideration if, for example, the surviving spouse is an architect, obstetrician or some other professional who could face big legal claims.

Still, many couples in stable first marriages might sensibly opt to leave everything to each other outright (with an "I love you" will) and include a backup "disclaimer" trust for the kids. With this setup, at the death of a spouse the surviving widow or widower can decide, based on the laws and the couple's assets at that time, which assets, if any, to disclaim (turn down) and divert into the kids' trust.

Gold and the companies that mine it have been getting a lot of attention lately. Some has come from Chicken Little investors in search of a hedge against the risk of inflation or the dollar's drubbing. Speculators have piled in, too, as gold prices have shot up 25% in the past year to a recent $1,370 an ounce. But if an anti-inflation, antidollar bet is what you're after, oil, up 15% in a year to $88 a barrel, is more alluring than gold, argues longtime value investor James Barrow.

"Every year there's more gold available, but oil is a diminishing resource," says Barrow.

While much of the 2,900 tons of gold produced annually is merely added to the stacks in London and Zurich vaults, the world is burning through, and sometimes spilling, a record 88 million barrels of oil a day. To Barrow that makes the companies churning out the oil both alluring commodity plays and solid income-earners.

Barrow, 70, is the last remaining founding partner of Barrow, Hanley, Mewhinney & Strauss, a value-oriented money management firm that handles $60 billion for Vanguard's Windsor II and 20 other mutual funds. Five years ago Barrow announced plans to retire by now.

"I lied," he laughs, explaining his desire to keep his hand on the tiller at least until the markets return to something resembling normalcy. Although his shop operates out of Dallas, Barrow says he's fond of the oil business purely because it offers blue-chip stocks at attractive valuations, plus yields high enough to make many a bond investor jealous.

He's especially partial to domestic producers, which pay set royalties per barrel of oil, regardless of spot prices. In most other resource-rich countries, as prices rise governments take increasing cuts of the upside.

In Barrow's view even BP's Gulf oil spill could prove a plus for the strongest U.S. majors, since they'll have the easiest time acquiring the leases and insurance needed to drill far offshore. In contrast, small operators are betting the entire company on every well.

"Big guys will dominate the deepwater," says Barrow. "If there's an accident, someone's got to be able to pay for it."