Last Updated: December 14, 2009
Retirement is a time to tie up loose ends. And for many that means making sure your estate plan does what it's supposed to. Unfortunately, that's not easy to do in the current environment. Yes, lawmakers in Washington, D.C. are presently trying to make it less difficult. For instance, the U.S. House of Representatives recently passed The Permanent Estate Tax Relief for Families, Farmers, and Small Business Act of 2009 — a bill which provides for a $3.5 million estate tax exclusion with no portability, a top estate tax rate of 45 percent, a continuation of stepped-up basis and ratification of the permanent repeal of the state death tax credit.
But according to FPA's Capitol Update the road to passage in the Senate is bumpier. According to that newsletter, many think the most likely outcome will be a one-year extension of current law, which will only compound uncertainty of planning your estate.
For his part, FPA member John J. Scroggin, J.D., LL.M., AEP of Scroggin & Company, said the following about the House-passed bill and what you might do now. "While the passage of a permanent $3.5 million estate exemption and a flat 45 percent rate was not expected by most tax practitioners this year, the provisions must still pass the Senate to become law," he said. "Given that there are only a few days left in 2009, I would wait until a final bill passes through Congress before making permanent plans based upon what the House passed."
"If the Senate does not pass the House bill, I would still expect Congress to pass a law to carry the 2009 rules across 2010 — few politicians want a year of no estate taxes that would otherwise occur," said Scroggin.
Therefore, he said, "most Americans should anticipate having a $3.5 million estate tax exemption and a flat 45 percent rate at least through 2010 and possibly as the permanent estate tax rules. Hopefully, we will have a better picture by the end of this year."
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