According to the Wall Street Journal and other news reports, the Obama administration and congress are planning "to move soon to block the estate tax from disappearing in 2010, suggesting the levy might outlive the 'Death Tax Repeal' movement that has worked against estate taxes for many years. Approved by President Bush and congress in 2001, elimination of most inheritance taxes has been phased-in over several years, pending full abolition of such levies as of 2010; however, again, according to a Wall Street Journal article, "the Senate Finance Committee will move within weeks" to reverse the Bush law, in order to preserve the estate tax.
Based on the
WSJ report, there are a couple of likely scenarios:
Under the plan articulated during the campaign, the Obama administration would lock in the estate tax at the most recent roll-back rate and exemption levels (i.e., exempting estates of $3.5 million to $7 million for couples from estate taxes while taxing estates above that level at 45%.
- On the other hand, if congress were to roll-back the estate tax rate to the levels seen during the Clinton administration, then the first $1 million would be exempted from taxation with the remainder of the estate taxed at 55%.
Now is the time to engage in your own estate planning. There are several tactics that you can employ to reduce the exposure of your estate to taxation while providing for your charitable interests and love ones. RocketLawyer.com's
Estate Planning Legal Help is a good place to start, along with
creating your own trust and finding an
estate planning lawyer to help you.
