Do you know the impact of the 2010 estate tax repeal on your estate plan?
Abstract: On Jan. 1, 2010, a one-year repeal of the federal estate tax went into effect, throwing many estate plans into disarray. The repeal also applies to the generation-skipping transfer (GST) tax, while the gift tax lives on with a top rate of 35% (10 percentage points lower than in 2009) and a $1 million lifetime exemption (the same amount as in 2009). This means that many estate plans might not meet their objectives; income tax bills could increase and transfers to trusts could be affected. So, while the future of the estate tax remains uncertain, it’s critical to review one’s estate plan to assess the impact of the current tax laws and to prepare for what the future might bring.