In this election year, the federal estate tax is truly up in the air. Currently the federal exemption from estate taxes and estate tax rate are supposed to change as shown below in the Federal Estate Tax Schedule.
This schedule poses a problem for estate planning attorneys and their clients - what should be the plan in this year of uncertainty and for the next few years?
Plan Now Because the Federal Estate Tax is Not Going Away
In light of this uncertainty, the two remaining presidential candidates have expressed their concerns with the full repeal of the federal estate tax that is scheduled to take place in 2010. Instead of repeal, Senator Obama supports making permanent the $3,500,000 exemption and 45% estate tax rate that are scheduled to take effect in 2009, while Senator McCain supports a $5,000,000 exemption and 15% estate tax rate. Suffice it say that in these trying economic times and impending change in the White House, it's clear that the federal estate tax won't be going away any time soon.
Don't use this uncertainty as an excuse to put off making your estate plan. The consequences of not having a plan are simply too great.
Federal Estate Tax Schedule
| YEAR | EXEMPTION | TAX RATE |
| 2008 | $2,000,000 | 45% |
| 2009 | $3,500,000 | 45% |
| 2010 | NO ESTATE TAX | N/A |
| 2011 | $1,000,000 | 55% |
