As 2009 drew to a close, most trust and estate practitioners believed that Congress would freeze the estate tax threshold at the 2009 exemption and rate structure of $3.5 million for estate planning in 2010. This “fix” never happened!
As a consequence, for individuals who pass away in 2010 there is presently no estate tax and new complicated rules for computing gain and loss from the sale of property inherited after 2009 have become effective.
Clients should revisit their estate plan periodically to review the appointment of estate fiduciaries and to consider how assets are titled. Titling will affect how those assets will pass upon their death. The distribution of estate assets under more sophisticated estate plans, including “marital deduction trusts” or “generation skipping trusts,” could be changed by the “repeal” of the estate tax.
Notwithstanding the confusion concerning the lapse of the estate tax however, we believe that the vast majority of our clients will not need immediate corrections to their estate planning documents.