Estate Tax In Limbo

It has been well publicized that the estate tax that we are all so familiar with disappeared for 2010.  There was speculation that Congress would act before allowing that to happen, especially with the federal government’s need for as much revenue as it can get.  However, other policy matters took center stage and the estate tax issue was not addressed.

As it stands now, if Congress does absolutely nothing, the estate tax will resurface again in 2011, and the exemption will be at the same level as it was back in 2002, $1 million.  This amount is far below the $3.5 million exemption in 2009.  It is widely believed that this will not happen, that something will be done before, but it is possible that we will see 2002-2003 level exemptions for estate tax purposes.

So what can you do? Obviously nobody in their right mind would try to time their date of passing, so for the most part you don’t do much.  If someone in your family does pass however, there are a lot of tax implications that must be examined by a tax professional.  CNN Money discusses the issues here.  If so you should speak with a financial/tax adviser so that you ensure you employ the best strategies for your estate, or that of your loved ones.