I subscribe to various list serve’s that are specific to estate planning, tax and elder law issues. Today a colleague of mine posted that he had recently heard Prof. Jeffrey Pennell, of Emory Law School, speak about this issue. Prof. Pennell is a very well respected law professor and his thoughts are not to be taken lightly. In any event, Pennell apparently opined that he did not think we would have any legislation on estate tax reform this year, that the estate tax law changes passed in 2001 would indeed sunset on January 1, 2011, and we would return to an estate tax exemption of only $1 Million.
If in fact we return to a planning world with only a $1 Million estate tax exemption, there appear to be many winners, and perhaps a few losers.
Democrats – more money to help with the deficit and high priority (and costly) legislation
Republicans – a proven effective fund raising issue (eliminate or lessen the impact of the "death tax")
States – reinstitution of the state death tax (sponge or pick-up tax) provides states with much needed revenue
Insurance Companies (always a strong lobbying group) – increase use of ILITs to provide liquidity for payment of estate tax and preservation of estate
Charities – more motivation for charitable playing (CRTs, CLTs and private foundations)
Unfortunately, that means that my clients and their families could very well be losers in this whole debate. Again, stay tuned to see if we actually do get some legislation passed.