What happened with the federal estate tax?

Real Estate Broker/Owner with RE/MAX Property Specialists RS294217 / RM423788

There has been a renewed flurry of activity on the federal estate tax.

And, if you think that this tax doesn't affect you, you may want to think again.

Oh Boy. What is Going On Now?

Unless Congress acts soon, the tax will start to apply to families with $1 million or more in assets

INCLUDING THE DEATH BENEFIT Of YOUR LIFE INSURANCE and your spouse's as well as the value

of all of your other assets and retirement accounts.


To make matters worse, the rate will again climb back to 55%.

So enough about why you might care. Now we should tell you what's happening. However, so that

the current situation makes sense, just a little bit of history.

First, Congress let the tax lapse so that if you die in 2010 there would appear to be no tax.  Then, they

threatened to make the tax retroactive to the start of this year.  

Now, it appears that unless they act, the tax will fall back to the old and unfriendly limits and rates that

will make many smaller estates subject to this tax.

If this sounds crazy - you're spot on. 

Just to reassure you, it is crazy.

So what is happening to the estate tax in Congress right now?

Just today, two senators introduced a motion to re-instate the $3.5 million dollar exemption and to

gradually increase it to $5 million while reducing the rate to 35%.

To see the federal estate tax motion, click here.

Warren Buffet and Bill Gates also appeared before Congress
to encourage reinstatement of the tax and today Bloomberg
is reporting that three advocates testified in support of fast
action on the estate tax.  

For a link visit our blog at www.PAEstatePlanners.com.

Ok.  Enough. What should I do?  

1) Check into our sites www.utbf.com/trust-estate or
www.PaEstatePlanners.com from time to time and watch for
details.  You can also keep an eye out for more email updates.

2)  If your will was executed prior to 2009 you may want to review it with us becasue of these tax changes.  

There is no charge for a telephone consultation and we can tell you if updates are required right now. As always,

before we make any changes we quote you a flat fee and verify that it is acceptable to you.

3) If your will was executed prior to 2001 it is almost certain to need updating.  Likewise, if you have

1) received an inheritance,

2) you have been married or divorced since your last will,

3) you have had additional children or grandchildren, or

4) you have purchased life insurance and/or there has been a substantial change in the value of your assets.


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federal estate tax

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Yvette Chisholm
Long & Foster Real Estate, Inc. - Rockville, MD
Associate Broker - Rockville, MD 301-758-9500

It is hard to plan when the rules keep changing or better yet...they won't tell you the rules.  Thanks for the post - very well written!

Jul 23, 2010 12:35 AM #1
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