Private Wealth Services Partner R. Scott Johnston was quoted in the New York Times article "A Bizarre Year for the Estate Tax Will Require Extra Planning" on January 8.
The article examined the potential ramifications that the expiration of the federal estate tax will have on heirs of the deceased. The tax, which has been around in some form since 1916, will take a one year hiatus, returning in 2011. Despite the tax's absence, Mr. Johnston pointed out that heirs could still be responsible for other costs. “We are in uncharted territory right now,” he said.
One expected hurdle is that those who were previously not subject to paying a federal estate tax, may now have to pay a capital gains tax. This includes assets that have appreciated in value over time such as property. It is possible that Congress could reinstitute the tax retroactive to Jan. 1. However, Mr. Johnston noted that uncertainty remains for the upcoming year. “You have to be somewhat hesitant,” he said. “In estate planning, you don’t typically want to be the test case if you’re trying to pass big bucks down through the ages.”