The expiration of the estate tax at the beginning of the year, and the threat of it returning with a vengeance in 2011 at a 55 percent rate for estates over $1 million, is giving estate planners fits.
Senate Finance Committee Chairman Max Baucus, D-Mont., had attempted to get at least a temporary extension in place by the Senate after the House voted to extend the estate tax at its current rate of 45 percent for estates over $3.5 million, but he was blocked in the effort by Senate Republicans, and some Democrats as well. Now he wants to get the estate tax fix passed sometime next year and make it effective retroactively, but that strategy might not survive the inevitable legal challenges.
Meanwhile, tax attorneys are reporting cases where clients are on life support and their families are trying to make decisions based on the prospects of tax law changes, according to The Wall Street Journal. Others are inserting provisions in their health care proxies that would let family members who decide on end-of-life care take into account the changes in estate tax law.
The doubts are sure to increase next year and pressure will mount on Congress to decide what to do as the days tick by.