Oct. 19 through Oct. 25 has been officially designated by Congress as National Estate Planning Awareness Week. This is a great time for attorneys to review their personal estate plans and to remind clients to do the same. A review is also warranted in light of the lack of clarity regarding the future of the federal estate tax.
Estate Tax Projections
There is uncertainty about what estate tax rules will apply after 2009. Currently, there is a $3.5 million exemption amount for federal estate tax purposes so anyone with an estate valued at no more than this amount and who dies in 2009 will owe no federal estate tax. Those with taxable estates in 2009 pay federal estate tax at no more than 45 percent. Starting in 2010, there is no federal estate tax; after 2010, the estate tax is set to return to levels that pre-date the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) (P.L. 107-16). That is, the exemption amount will return to $1 million and a top estate tax rate of 45 percent following the sunset of the EGTRRA provisions.
