Negotiating Estate Tax Gridlock
Estate Planning and Administration Partner David Sloan was quoted in a SmartMoney article titled, "Negotiating Estate Tax Gridlock."
With its attention focused intensely on health care and financial reform, Congress failed last year to renew the estate tax, which taxed multimillion-dollar estates and expired at the end of 2009. Although a year with no estate tax might sound like a potential windfall, the situation can present pitfalls. From marital bequests to generation-skipping transfer taxes, the effects are far-reaching. If Congress does nothing, the estate tax will revert back to what it was before the law was enacted in 2001: a $1 million exemption and a progressive tax rate that tops out at 55%. "That would expose a broader swath of the population to estate taxes," noted Mr. Sloan. Add up the equity in your house, your retirement portfolio, life insurance policy, and it's not hard to reach $1 million. He stresses the importance of careful estate planning. "What we're doing for our clients is saying: Here's your pile of assets. Ignoring the estate taxes; how do you want to divide it up upon your death?"