A Prescient Look at the Future of Estate Planning
This crystal-ball-gazing session is informed by three distinct subjects. The first is the current and continuing uncertainty in the law that affects estate planning today. Will Congress act before January 1, 2013 to prevent the scheduled reversion of the law to its status in 2001? Might we expect some last minute (or later than last minute but retroactive) change that makes permanent any part of the current provisions — especially including those that were adopted as part of the 2010 compromise tax agreement? Having been totally surprised by the Obama administration’s compromise in the December 2010 legislation, predictions seem pretty foolhardy at this time, so on this prognostication you’re pretty much on your own. At a minimum, it seems unlikely that the Obama administration will be willing or able to put its thumb on the scale during a lame duck session following the 2012 presidential election.
For what little it is worth, surveys of estate planners show that most believe that the status quo — a 35% flat rate, a $5 million exclusion amount that applies for gift and estate tax purposes, and portability — all will remain in the law. That prevailing wisdom may reflect a lack of imagination or historical memory. It may reveal a lack of cynicism about the legislative process. Or it may predict a lack of political ambition on the part of Congress. If I had to bet I would put even odds on Congress doing nothing before January 1, 2013, with the law reverting to the $1 million level and a 55% rate, followed by Congress acting sometime late in 2013 or perhaps even in 2014 to retroactively make permanent the two things that it did in December of 2010 that I anticipate are toothpaste that is out of the tube and cannot be reversed, being the $5 million exclusion and portability.
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