new estate tax law

[TrustUser]

it looks as if it has been signed.

5 million per person, 35% after that.

also, it appears to me that a spouse is automatically being given a deceased spouse's exemption amount to add on. so in theory, the a/b trust may not be necessary.

but i still think it is prudent to do so, cuz our govt changes its mind more often than a woman changes her clothes.

 

[tranquility]

In the CCH summary, it seems like we're back to the step-up basis rather than carryover too. As well, there is an election for those who died after 12/31/2009 and before 1/1/2011 the option to apply the estate tax based on 35% up to $5 million with step-up or no estate tax and modified carryover basis.

It also allows for "portability" between spouses (as trustuser mentions) where the surviving spouse may elect to take advantage of the unused portion of the estate of his predeceased spouse. I'd still use a B trust plan as the law expires in 2012.

There is also a deduction extension for state death tax credit/deduction to 2012.

There is a nine month extension to the filing of certain required forms or to do certain acts for those dying after 12/31/2009.

The gift tax rate for 2010 is made to comport to 35% rate but with the $1 million exclusion. After 2010 the gift tax and estate tax is reunified with a top rate of 35% and a $5 million exclusion. (annual exclusion is still $13,000 for 2011)

The Generation Skipping tax is $5 million exemption for 2010. For transfers after 2010 the rater would be equal to the highest estate and gift tax rate for the year.