Estate Planning for 2010 and Beyond
In 2010 the estate tax expired for the first time since 1916. As we head into the third quarter of 2010, projections of Congressional action or inaction on the estate tax front are being whispered across the country. There is a real possibility that we will face another year of Congressional inaction and that the estate tax laws will return to what they were prior to 2001. That would mean the federal estate tax exclusion would return to $1 million and the estate tax rate will return to 55 percent (and 60 percent for estates exceeding $10 million).
Some speculate that Congress will pass legislation that will return the law to what it was in 2009, with a $3.5 million exclusion from estate tax and a top marginal tax rate of 45 percent. Others believe Congress will do nothing in 2010 but will enact some legislation in early 2011. No one believes Congress will have the time or ability in what remains of 2010 to overhaul the entire estate tax system.
On the opposite side of the whispered tones are loud and boisterous proposals of attorneys and advisors shouting carpe diem (seize the day)! In other words, take advantage of the gifting and other tax opportunities available in 2010 that aren’t likely to reappear in the near future.