WHAT ARE THE LIKELY FUTURE CHANGES TO THE ESTATE TAX LAWS?
With the new President and Congress, the following are the likely potential changes to the federal estate and gift tax laws: 1.1. Changes to the Federal Estate Tax Rates and to the Estate and Gift Tax Exemptions. Under current law, during the 2008 taxable year, the federal estate tax exemption is $2,000,000 per person, while the gift tax exemption is $1,000,000 per person. This estate tax exemption increases to $3,500,000 in 2009. Under current law, in 2010 the estate tax is scheduled to be repealed, with reinstatement of this tax in 2011 with only a $1,000,000 exemption and a top tax rate of 55%. Based upon the candidates’ political statements during the election, the federal estate tax exemption is likely to remain at a minimum of $3,500,000, and the top estate and gift tax rate will be in the 35% to 45% range.1 There has also been discussion to unify the gift and estate tax exemption to one amount. 1.2. Portability of the Federal Estate Tax Exemption Between Spouses. Both Democrats
