Certainties: Death – Yes, Taxes – Probably, Death Taxes – Depends

I met with a couple yesterday for some preliminary information on estate planning and once again I had to explain that things are not very clear at the moment regarding estate taxes. In 2009, the federal estate tax exemption was $3.5 million with a 45% tax rate. In 2010 there is an unlimited exemption as the estate tax has been repealed. Some have said that 2010 is a great year to die if you have a multi-million dollar estate. In 2011, unless Congress changes the law, the exemption level will fall to $1 million with a 55% tax rate.

I came across an estate tax internet resource guide put together by Trusts and Estates magazine that has articles on the fate of the estate tax and suggestions for practitioners. The article at the end puts a damper on the whole “die in 2010” plan as the TaxProf Blog points out that the re-enactment of the estate tax in 2010, retroactive to Jan. 1, 2010, likely would pass constitutional muster.