South Carolina Trust
and Estate Law Blog

I originally wrote this post last week, but for some reason it did not publish to the blog.  Anyway, a deal has been announced by President Obama between Republicans and Democrats concerning the federal estate tax. It seems that the Blanche Lincoln/John Kyl proposal is currently winning the day, with a $5,000,000.00 exemption per estate and a 35% tax rate.  I previously wrote about this proposal here.  The devil is in the details, and unfortunately details are a bit scanty at this time.  This proposal of course has to be passed by both the Senate and the House of Representatives, and there is fierce opposition at the moment from some Congressional Democrats.  There may be a provision as well to allow estates of persons dying in 2010 the option of filing an estate tax return under the 2011 law, or to elect to use the 2010 law with its carry over basis scheme, which would eliminate the possibility of litigation over the constitutionality of retroactive estate tax legislation.  Stay tuned…..

In 2009, it was inconceivable that in 2010 there would be no federal estate tax or generation skipping tax.  Now with 29 days left in 2010, it is inconceivable that in 2011 there will be a resurrected federal estate tax with a one million dollar exemption level and a 55% top rate, and a generation skipping transfer tax exemption of approximately 1.3 million dollars with a 55% rate.  The change over from 2010 to 2011 may usher in monumental changes in U.S. tax law.  The Congress continues to debate.  Will anything get done? Stay tuned.  If your net worth is anywhere in the one million dollar range, you need to be paying attention over the next few weeks.