A compromise on the estate tax was part of the negotiations surrounding last week’s averted government shutdown. President Obama and democrats agreed to spending cuts and compromised on tax issues including the estate tax. The President made it clear that any decisions on the estate tax were temporary and made begrudgingly.
“We will provide incentives for businesses to invest and create jobs by allowing them to completely write off their investments next year,” the President said. “In exchange the Republicans have asked for more generous treatment of the estate tax than I think is wise or warranted. But we have insisted that that will be temporary.”
The federal estate tax is a topic that we have discussed in previous posts. It was allowed to lapse in 2010 but ultimately reinstated.
The reinstated tax deal was announced on December 6, 2010 and provided for a 35 percent tax rate and a $5 million exemption for two years. These rates were described as “generous” by the Obama administration and the President suggested that he would be less willing to compromise on any further estate tax reform, Forbes reports.
Taxes are just one consideration in constructing a prudent and comprehensive estate plan. Regardless of the amount of assets that a person owns, an experienced estate planning attorney can help a client make good choices about passing wealth to loved ones.
An attorney will help determine the tax implications of certain transfers as well as how end-of-life-care decisions will be made, who will deal with transaction matters if you become incapacitated, and what documents are appropriate to achieve your estate planning goals.
Source: Forbes: Estate of Confusion, “Obama: The Federal Government Will Be Open For Business,” Hani Sarji, 4/9/11