December 8, 2010
As we write this, the clock keeps ticking on the Federal Estate Tax. Will Congress and the President retroactively reinstate the estate tax for 2010? It appears that this could be the case based upon recent developments from Washington D.C. It appears that there could be a choice to apply the 2009 estate tax law to 2010 estates or to elect the 2010 law for deaths in 2010. We will keep you informed as news develops as the applicability of the estate tax for 2010 has still not been fully determined.
Federal Estate Tax returning to pre-2001 levels?
Another question is will Congress and the President act quickly enough to prevent the return of the Federal Estate Tax to its pre-2001 levels? Although it is possible that the Federal Estate Tax could return to the pre-2001 limits, it appears that a tentative agreement could increase the limits for 2011 and 2012,with a lower 35% tax rate. Make sure you are prepared and ready to act, regardless of what the outcome is in Washington.
Give Yourself Peace of Mind
A properly crafted estate plan can give you peace of mind, knowing your assets and family are well protected. Our estate planning lawyers will help you get there.
“Carry over basis”
Although there is no estate tax for 2010, at least as of now, there was a little known “carry over basis” tax system in place for 2010 in lieu of the Federal Estate Tax. This system treats the basis of some property for deceased individuals like that of a gift, i.e., a “carry over basis.” This “carry over basis” system has important ramifications for many trusts, estates, life estates, and marital basis allocation plans. Although this can be complicated, there are important actions that may need to be taken for people who passed away in 2010 and for the heirs and beneficiaries of people who passed away in 2010, depending upon the size of the deceased persons estate.
Ongoing uncertainty
Uncertainty exists to whether the Federal Estate Tax will be retroactively reinstated for 2010, but it appears more and more likely that it could be reinstated retroactively, with a choice of choosing the 2009 estate tax law or the 2010 estate tax law. Check back in the coming weeks for an update as to any progress made with respect to the Federal Estate Tax. We will keep you updated on the changes, good and bad, with respect to the Federal Estate Tax, including how it may affect Wisconsin and Kenosha area residents.
Please do contact us if we can be of assistance or if you have questions.