Under the current Economic Growth and Tax Relief Reconciliation Act ("EGTRRA")if a person dies in 2009 with less than $3.5 million in their estate, their are no estate taxes. Well over 95% of U.S. citizens who die in 2009 will have less than $3.5 million in their name. Under EGTRRA, the estate of anyone who dies in 2010 will not be subject to estate taxes--regardless of how much their estate is worth. For example, if you had assets worth $100 million and died in 2010, your heirs would pay nada, zero, zilch in estate taxes. This is only for 2010. The estate tax returns for those who die in 2011 and thereafter.
Will Congress pass a law in time to prevent the death of the estate tax for the year 2010? Beth Shapiro Kaufman in July's issue of Estate Planning points to the fact that a few congressmen have tried to repeal the estate tax completely, but most think there should be an estate tax of some sort. The sticking point is what the ceiling amount or exemption from taxes should be--something less than the existing $3.5 exemption, $3.5 million, 5 million, or some other amount? No matter the exemption amount, Ms. Kaufman indicates that time is of the essence for Congress to do something now in 2009 in order to prevent the death of the estate tax exemption in 2010.
There is no question in our mind at Hughes Estate Group that there will be an estate tax of some sort imposed on those who die in 2010 with more than $3.5 million to their name. To plan or postpone planning in the hope that there will be no estate tax in 2010 is unwise.
Summary on Estate of Beyer v. Commissioner
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