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Tax Rates Extended and Estate Tax bite reduced.

In the final handful of days in 2010, Congress and the President reached an agreement to extend the current tax rates for another two years. Additionally, the legislation replaces the Estate Tax exemption of $1 million and 45% estate tax rate with an exemption of $5 million ($10 million for married couples) and a estate tax rate of 35%.

This is a great piece of legislation for people whose estate is at or above the $1 million amount. However, this deal between Congress and the President is short-lived. People with substantial assets still need to give serious consideration to whether or not their estate plan should prepare for tax consequences in the future. This is because with only a two year extension of these exemptions and rates, Congress has given us some breathing room but really only “kicked the can down the road”.

We are always here to any questions you may have.

Posted in Elder Law.