Estate Tax Repeal Update: The End of Repeal
Yesterday in an article for The Wall Street Journal, Jonathan Weisman reported that once President-elect Obama takes office next week, Democrats in Congress will act quickly to end the repeal of the federal estate tax that’s scheduled to take place on January 1, 2010.
In his article, Weisman summarizes the interesting history of the forces behind President Bush’s 2001 legislation that led to the gradual increase of the estate tax exemption from $1,000,000 to the current $3,500,000 exemption. The article also reports that if the current exemption is locked in for the next 10 years, then only about 2% of estates will be subject to the estate tax and the U.S. Treasury will lose around $324 billion more than if the estate tax exemption is allowed to revert back to the pre-2001 amount of $1,000,000 - what it’s currently scheduled to do in 2011.
What does this mean for you and your family? If you are like most of my clients, you will be more than covered by the $3,500,000 exemption –at least until the economy improves, houses start appreciating in value at double digit rates, and the stock market shoots up about 60%.
When all of those good things happen you can start to worry about estate taxes if you want. As for me, I take the Bobbie Mcferrin approach, ”don’t worry, be happy” – it’s estate tax repeal that is dead, not you.
Tags: Estate Planning, Estate Tax, trusts
