The Federal Estate Tax. It's 2009, and the most significant estate planning news is that the exemption from Federal Estate Tax is now $3,500,000! This means that only estates with a total net worth (assets minus debts, such as mortgages, etc.) greater than the exemption will be subject to estate tax. Current law provides for the estate tax exemption to become unlimited in 2010 (no tax for anyone!), but decrease to only $1,000,000 in 2011. However, current bills in the House and Senate propose keeping the exemption permanently at $3,500,000. We'll keep you posted when the law is finalized.
How does this affect you? If your living trust contains "marital deduction" language (designed to eliminate or reduce estate tax), and your estate net worth is below the $3,500,000 exemption, it is critical that you have your trust amended to reflect current law. Call us for an appointment to see whether your estate plan is affected.