Estate Tax Update!
According to the Tax, Trusts and Estates Law Monitor, it appears increasingly likely that the imminent federal estate tax legislation this year will be a one-year “patch,” or a one-year freeze of the 2009 rules (a 45% estate tax rate and a $3.5 million exemption).
The Monitor states that the Association for Advanced Life Underwriting (“AALU”), an important trade and public affairs group, believes that permanent reform is less likely this year and that enactment of a one-year patch is the most likely outcome. The AALU predicts that the Senate debate on the estate tax will extend to mid or late December.
What this means: Under current law, estates of $3.5 million or more are subject to a federal estate tax which is scheduled to be repealed in 2010 but brought back in 2011 for estates of $1 million or more. The "one year patch" extends the tax for estates of $3.5 million or more through 2010 while Congress decides what to do for 2011 and beyond.
We will continue to post updates regarding this legislation as they arise.
