• Practice Area Notes

    A question we are frequently asked these days is "Will there be estate tax reform next year?" As you may be aware, the "credit shelter amount," which is the maximum amount that can pass free of estate tax, is $2,000,000 in 2008, increasing to $3,500,000 on January 1, 2009. Under current law, the estate tax will be repealed in 2010, meaning the amount that can pass free of tax will be unlimited, but only briefly, before it will be restored in 2011, with a $1,000,000 credit shelter amount and a top tax rate of 55%. The good news is that there is broad-based agreement in Washington that neither the unlimited exemption nor the $1,000,000 credit shelter amount are good policies. During the campaign, President-elect Obama supported an extention of the current law as of January 1, 2009, which would mean a $3,500,000 exemption and a maximum tax rate of 45%. We hope this issue will be resolved soon.