Bloomington, Indiana Estate & Elder Law Blog

Wednesday, May 12, 2010

More Rumblings About the Estate Tax

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.


Tuesday, May 11, 2010

Possible Estate Tax Proposal Forthcoming?

Despite promises by our congress that estate tax reform would be a priority in the new year, as of yet, nothing has happened. It has been reported that Senate Minority Whip Jon Kyl (R-Ariz) is working on an estate tax proposal. This article from The Hill discussed that proposal which would set the estate tax exemption at $3.5 Million with increases up to $5 Million over time and tax rates of 35%. It was not clear how much success this would have of passing with the pay-go rules that may require corresponding "off-sets" to the proposal. Stay tuned.

Friday, December 18, 2009

They Said It Couldn't Happen

Effort to Extend Estate Tax Fails

According to a Wall Street Journal article at the Senate has failed to pass a patch to the estate tax laws that would have kept the estate tax from expiring in 2010. Apparently the Democrats favored keeping the 2009 levels in place (a $3.5 million exemption and a 45% tax rate) whereas the Republicans favored a $5 million exemption and a 35% top rate. It is possible that passage of a new law in 2010 will be made retroactive to January 1, 2010.
It appears that issues such as whether College Football should institute a playoff system may be deemed more important by our Congress than trying to address the issue of estate taxes. See

Stay tuned. Hopefully there will be some legislation early next year that will provide some certainty to the estate tax issue.

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