No one ever thought that this would happen. Congress cannot just let this lapse. They will lose too much tax revenue. It doesn’t make sense.
But, that’s the conclusion of the Wall Street Journal after a review of trust and estate lawyers at a recent gathering. And those of you who are my clients know that for years we have been waiting for Congress to act to fix the deeply flawed estate tax. And, no one ever really believed that congress would let the tax go away. I still don’t believe that they will.
They seem to be totally pralyzed by health care reform. However, they seem to be considering a one year “fix.” Under this plan the law will stay as it is for one more year and then fall back to the old $1 million dollar exemption. But, if they let it lapse, they will probably re-enact it shortly after in 2010 and make it retroactive to the start of the year. Sound unfair or unconstitutional? Read this Wall Street Journal Article on the retroactive estate tax issue.
The bottom line: If the tax disappears, millions of wills will no longer make sense as they are drafted according to formulas linked to the law. If Congress doesn’t act soon call your estate planning lawyer or attorney.
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