The estate tax is the sticking point. So say the pundits this Wednesday morning, December the 8th. The proposal accepted by President Obama, which keeps personal tax rates at their current level, sets the death (estate) tax lifetime exclusion at $5 million. Estates passing more than that in asset value would have to pay 35% on that amount within nine months of the loss of the loved one.
So the Senate, going against all conventional wisdom and their own statements, allowed the death tax to be repealed for this year, 2010. Now they think this lifetime exclusion amount is too high and that the rate of the tax is too low. They may get a compromise.
Reader, know this: there’s nothing in the law that’s permanent. All things change. Putting automatic repeals or changes to tax code provisions make them no more changeable than they’ve ever been. Look: our federal Congress is almost always in session and they’re constantly making new laws and changing old ones. The death tax goes up, down, sideways, gets repealed, gets killed, buried, and yet, it keeps coming back.
When are you going to die?
If married, when is your spouse going to die?
How much will your entire estate be worth?
What will the law be at that time?
If they ‘permanently’ repealed the death tax today, do you not believe that next month, next year, four years from now, a new congress would bring it back?
You see, planning, estate planning, doesn’t limit your choices. It doesn’t paint you in a corner. On the contrary, planning allows for choices; for you, for your loved ones, for the organizations and causes you support.
photo credit: Lars P