The Debate Continues And The Future Of The Estate Tax Remains Uncertain
Under current law, an individual can pass as much as $2 million free of federal estate tax.
Dennis M.
Sandoval, Director of Education for the American Academy of Estate Planning Attorneys, says that amount can be easily doubled with simple planning by married couples.
In 2009, the amount is scheduled to increase to $3.
5 million.
In 2010, the estate tax is repealed.
However, the relief from estate taxation is only short-lived.
Like a phoenix rising from the ashes, the estate tax reappears in 2011 for all individuals with estates in excess of $1 million.
The current tax system has created much uncertainly and wreaked havoc among estate planning attorneys.
In recent years the debate of whether to repeal the estate tax has become more heated.
Many wealthy individuals have voiced their opposition to the repeal of the estate tax, especially at a time when the economy appears to be slowing, Congress seems incapable of reining in the record deficits and at least some believe the war on terror needs to be continued.
Among this group are William H.
Gates, Sr.
, the father of Microsoft founder, Bill Gates; legendary investor Warren E.
Buffett; billionaire financier George Soros; philanthropist David Rockefeller, Jr.
and Ben Cohen, co-founder of Ben and Jerry's.
Senator Jon Kyl (R- Arizona), a leading proponent of estate tax repeal, stated the estate tax needs to be repealed in order to protect family-owned businesses and family farms.
"Yet, a Congressional Budget Office ("CBO") report found that very few farmers and small business owners actually paid any estate taxes.
Mr.
Sandoval says that experienced estate planning attorneys routinely advise wealthy farmers and business owners how to reduce or eliminate the estate tax, including ownership of life insurance in special trusts.
The death benefits of these policies, which pass income and estate tax free to heirs, can be used to pay estate taxes as well as to facilitate the distribution of the farmer's estate between family members who want to continue to operate the farm and those family members with other business pursuits and desires.
Neil E.
Harl, an economics professor at Iowa State University whose expertise in estate tax planning for farmers has made him a household name in the grain belt, said many Americans had a false impression that the estate tax was destroying family farming.
Michael J.
Graetz, a professor at Yale Law School said the repeal of the death tax is primarily a benefit to people with large estates held in stocks and other securities, not to farmers and small business owners.
No matter what side of the fence you fall on, for repeal or for reform of the estate tax, the law as it currently exists creates much uncertainty.
It is unlikely any repeal or meaningful reform of the estate tax will occur until after the 2008 Presidential elections.
In the meantime, individuals with more than $1 million in net worth should seek the advice of an experienced estate planning attorney.
Dennis M.
Sandoval, Director of Education for the American Academy of Estate Planning Attorneys, says that amount can be easily doubled with simple planning by married couples.
In 2009, the amount is scheduled to increase to $3.
5 million.
In 2010, the estate tax is repealed.
However, the relief from estate taxation is only short-lived.
Like a phoenix rising from the ashes, the estate tax reappears in 2011 for all individuals with estates in excess of $1 million.
The current tax system has created much uncertainly and wreaked havoc among estate planning attorneys.
In recent years the debate of whether to repeal the estate tax has become more heated.
Many wealthy individuals have voiced their opposition to the repeal of the estate tax, especially at a time when the economy appears to be slowing, Congress seems incapable of reining in the record deficits and at least some believe the war on terror needs to be continued.
Among this group are William H.
Gates, Sr.
, the father of Microsoft founder, Bill Gates; legendary investor Warren E.
Buffett; billionaire financier George Soros; philanthropist David Rockefeller, Jr.
and Ben Cohen, co-founder of Ben and Jerry's.
Senator Jon Kyl (R- Arizona), a leading proponent of estate tax repeal, stated the estate tax needs to be repealed in order to protect family-owned businesses and family farms.
"Yet, a Congressional Budget Office ("CBO") report found that very few farmers and small business owners actually paid any estate taxes.
Mr.
Sandoval says that experienced estate planning attorneys routinely advise wealthy farmers and business owners how to reduce or eliminate the estate tax, including ownership of life insurance in special trusts.
The death benefits of these policies, which pass income and estate tax free to heirs, can be used to pay estate taxes as well as to facilitate the distribution of the farmer's estate between family members who want to continue to operate the farm and those family members with other business pursuits and desires.
Neil E.
Harl, an economics professor at Iowa State University whose expertise in estate tax planning for farmers has made him a household name in the grain belt, said many Americans had a false impression that the estate tax was destroying family farming.
Michael J.
Graetz, a professor at Yale Law School said the repeal of the death tax is primarily a benefit to people with large estates held in stocks and other securities, not to farmers and small business owners.
No matter what side of the fence you fall on, for repeal or for reform of the estate tax, the law as it currently exists creates much uncertainty.
It is unlikely any repeal or meaningful reform of the estate tax will occur until after the 2008 Presidential elections.
In the meantime, individuals with more than $1 million in net worth should seek the advice of an experienced estate planning attorney.
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