"If the Congress doesn't do anything by the end of 2010, the estate tax will go back to 2001 levels with a $1 million personal exemption and a maximum rate of 55 percent. Why haven't they done anything yet?"
--THE MONTGOMERY ADVERTISER (OCT. 17, 2010):CONGRESS UNLIKELY TO TACKLE ESTATE TAX (http://www.montgomeryadvertiser.com/article/20101017/BUSINESS/10160352/Congress-unlikely-to-tackle-estate-tax)
We certainly have seen plenty of speculation about the fate of the federal estate tax this year. I have my opinions and every other attorney and tax expert has theirs. Unfortunately, there is not a lot of consensus amount tax attorneys. Oh....Just in case you missed it, this is the year the federal estate tax was repealed – for one year only. Unless Congress takes some action otherwise, however, the tax will return January 1, 2011 … reverting back to the 2001 rules with a $1 million personal exemption and a maximum rate of 55 percent. Economists and politicians have weighed-in on the subject all year long. At one point, virtually all of the “experts” agreed that Congress would “most likely” institute a $3.5 million exemption amount and a top rate of 45 percent, and applied it retroactively to 2010.
Most now agree that is an unlikely scenario...but they don't agree what exactly will happen.
Columnist John Norris writes convincingly that he thinks Congress will not act, and that the 2001 rules will go into effect next year. He suggests that if your estate exceeds $1 million, you consider getting yourself to an estate attorney. I would have to add that, if you have not planned or updated your estate plan recently, it’s time to get moving … whether your estate exceeds the $1 million exemption or not. It may also be time to add some insurance to your estate to cover taxes or replace wealth that is dissapated because of taxes (especially for owners of small businesses, family farms, and real estate).
You can learn more the federal estate, and even project how the return of the estate tax could affect you by using the handy Estate Tax Calculator on our website. Use this calculator to project the value of your estate, and the associated estate tax, for the next ten years. Also, if you’re ready, you can use this handy form to request an estate planning consultation. The estate and gift taxes are comlex to navigate--so I highly recommend retaining an attorney that devotes a substantial portion of his or her practice to estate planning to assist you with planning your estate.
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