Advisors' Corner
The Federal Estate Tax
Now You See It, Now You Don’t
By Attorney John M. Discenza
In 2000, Congress scheduled a gradual increase in the estate tax exemption, eventually reaching $3.5 million in 2009. Congress also scheduled a one-year repeal of the estate tax for persons dying in 2010. Finally, Congress scheduled a return of the estate tax in 2011, reverting to a $1 million exemption and maximum rates of 60%!
Few believed that Congress would allow the 2010 estate tax repeal, but all attempts by Congress in late 2009 to stop the 2010 repeal failed.
Congress is currently considering a retroactive reinstatement of the estate tax for persons dying this year!
Where does that leave the state of estate tax planning when:
- there may be no federal estate tax for any persons dying in 2010;
- Congress may retroactively reinstate the federal estate tax as of January 1, 2010;
- Congress may do nothing this year and simply allow the estate tax to revert to the $1 million exemption and the 60% rates for persons dying January 1, 2011, and later?
So what does one do? If you have no estate plan in place, ask your estate planner to draft one, considering all the above estate tax possibilities. If you have your estate plan in place, ask your estate planner to review your documents to see if any changes should be made, considering this state of "estate tax limbo."
Now you see it, now you don’t. Will you see it again?
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