WHAT WILL THE FEDERAL ESTATE TAX EXEMPTION END UP BEING?
Estate planners (and their clients) would like to know what Congress is going to do with the Federal estate tax exemption. For 2009, the estate tax applicable exclusion is $3.5 million ($7 million per married couple). The estate tax rate is 45%.
As we near the end of a 10-year piece of legislation, if Congress does not act, there will be no estate tax in 2010 and the Federal estate tax exemption will be $1 million ($2 million per married couple) in 2011.
A recent budget proposal of President Obama and the House of Representatives would extend the current $3.5 million exemption and 45% estate tax rate. In a narrow vote, the Senate passed an amendment to its version of the budget resolution that would increase the estate tax applicable exclusion amount to $5 million ($10 million per married couple). It’s believed the Senate version of the budget resolution is not likely to be successful because it is not supported by the Democratic leadership. Also, it is estimated that it would increase deficits by $91 billion in the first 10 years when compared with the cost of the President’s proposal. Tax Policy Center Table.
If you have questions regarding planning your estate to minimize the effect of estate taxes, please contact our estate planning department.
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