Estate and Elder Law

The Future of the Estate Tax?

In the last couple of weeks there has been a flurry of activity in the estate tax world. However, it simply has added to the continuing uncertainty regarding the future law. Absent new law, the $5 million exemption amount protecting taxpayers from gift and estate tax will expire at the end of 2012 and only a $1 million exemption will be in place in 2013 forward.

On March 28th, 21 Republican Senators proposed legislation to permanently repeal the estate tax. The legislation is similar to that introduced in the House in 2011. However, because of the current political environment, even the Bill's sponsors acknowledged passage is "an uphill battle."

Conversely, on March 29th, a group called the "Americans for a fair estate tax," wrote all members of Congress, proposing an exemption amount of $1.3 million and a marginal tax rate of 55%.

Finally, on April 4th, the American Bar Association asked Congress to enact a number of technical changes to existing law, but the ABA did not suggest what the proper exemption amount should be. The ABA did propose that Congress address the uncertainty caused by lapsing laws and political posturing, and once and for all adopt long term, sensible legislation, to address lifetime and death asset transfers. 

Read more discussion of estate planning topics affecting Virginia residents and U.S. citizens at Dedon on Estate Planning.

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