3rd May 2010
We still don’t know where Congress and/or the President will go with the Estate Tax.
On February 2, Treasury Secretary Timothy Geithner and Senate Finance Committee Chairman Max Baucus (D-Mont.) said they support extending the 2009 estate tax rates to 2010.
This would mean a reinstatement of the estate tax, and that the exemption amount would be $3.5 million.
More telling, is that they stated that the tax would be retroactive to January 1, 2010.
Those who have been following this saga have always thought that any change in the law would be made retroactive to the first of the year. Thus, my caution not to settle any decedent’s estate this year on the belief that there is no estate tax on the estates of persons dying in 2010.
The inability to plan in this environment hurts the families of decedent’s who are attempting to comply with the law while dealing with the death of their loved one.
“The Hill” reported in March that Senate Majority Leader Harry Reid (D-Nev.) and Minority Whip Jon Kyl (R-Ariz.) are working on “a fix”, but so far their effort has failed to produce a consensus.
Fear of the November elections, and Congress’ myopic view of legislation, may mean that nothing is done.
This would mean more problems in 2011 when the estate tax jumps back to 2001 levels that tax estates over $1 million, with a tax rate that tops out at 55%.
As “The Hill” reported: “This outcome makes lawmakers vulnerable to accusations of raising taxes….at a time of economic uncertainty.”
I guess we’ll just wait and see what they come up with next.
DWIGHT EDWARD TOMPKINS
ATTORNEY AT LAW
This blog is intended for informational purposes only and is not a substitute for legal advice from a qualified estate planning attorney in your jurisdiction.