The Estate Tax: Whither Goest Thou?

Posted by Bob Burton on Wed, Dec 1, 2010 @ 12:47 PM

The following release was just received from the AALU:

Following yesterday’s meeting at the White House, congressional leadership has assigned representatives in both chambers to continue negotiations on taxes in earnest.  The representatives in the Senate are Sens. Max Baucus (D-MT) and Jon Kyl (R-AZ).  It is anticipated that Senator Baucus will introduce a bill shortly that will address income tax rates and the estate tax.  The estate tax proposal will mostly follow the parameters of Pay-Go, i.e., a $3.5 million exclusion and a 45% rate, and may include a farm/ranch exemption, portability, and indexing.  We continue to work for the inclusion of reunification in the base text of that legislation and are encouraged by lawmakers’ willingness to include other technical features.  We expect the GRAT provision will be used as a pay-for, but it is not likely that they will use valuation discounts.  However, AALU anticipates difficult negotiations on the estate tax and recognizes that a reversion to 2001 estate and gift tax law is still very possible given the brief work period and other competing priorities.

We will keep you updated as developments warrant.

Bob Burton LLB CLU ChFC AEP
Director of Advanced Planning