Excerpt from The Mercury: (click for entire article)
The Economic Recovery and Tax Relief Reconciliation Act of 2001 modified the Federal Estate Tax law by reducing the maximum tax rate, as well as gradually increasing the size of an estate that would result in federal estate taxes being due.
For instance, if a person passed away in 2009, and his or her estate was worth less than $3.5 million, then no federal estate tax was owed. In 2010, there is no federal estate tax for anyone. However, it was assumed all along that Congress would act prior to 2010, and come up with a more permanent solution.
As reported in Elder Law Answers (www.elderlawanswers.com), Congress has let the estate tax law expire since Senate Democrats were unable to persuade Senate Republicans to extend the 2009 law for a few months. Congress may reinstate the tax retroactively in 2010, but this is by no means certain. In the meantime, estate planning attorneys and their clients are trying to figure out what to do.
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