Monday, December 07, 2009

New Developments in the Estate Tax Arena

The question on every estate planning attorney’s mind (and on the minds of our clients) is what will happen to the estate tax next year?  There is less than a month left before the estate tax expires, and although nobody expects our representatives in Washington to actually let that happen, as of yet there are no firm resolutions regarding the matter.  We are, however, getting closer. 

The House recently voted not to let the estate tax expire, but instead to let it continue indefinitely at the current rate. Unfortunately the legislation has yet to make it through the Senate, and considering the gridlock that body is experiencing over health care reform, holding our breath for a decision on the estate tax before year’s end isn’t recommended.

The issue that estate planners are most concerned about at this time is not actually what the final decision will be (although that certainly is important), but how long it will take our government representatives to reach that decision. It is generally assumed that any decision reached in 2010 regarding the estate tax will be retroactive, which means that any estates opened next year before the decision is made might at some point have to pay estate taxes retroactively. The possibility of retroactive estate taxes means that holding off on your estate planning until after the legislation has passed is not as wise a decision as you may think.

We know our lawmakers have a lot to think about as 2010 approaches, but so do you—the taxpayers.  Let us help you start the New Year off on the right foot: Making your own decisions about your estate planning, and keeping one step ahead in the game.