Legal News

Congressional Bickering Stalls Estate Tax Fix

By (Breaking Legal News)

Attorneys Say Clients Left in Limbo

Yet again, the U.S. Senate reached a dead-end this week on a possible solution to the expired estate tax. Unless action is taken soon, the federal tax -- temporarily phased completely for this year only -- will jump to a 55 percent rate with a $1 million per spouse exemption in January.

?Hope was in sight,? said Boston area attorney Hank Whittenberg, a tax and estate planning specialist, "but Congressional bickering blocked a reasonable solution. It seems that each party will continue using this as political fodder until after the mid-term elections -- and then it might be too late to take any action before the end of the year."

Members of the Senate appeared to be in general agreement of a proposal to eliminate a retroactive estate tax increase and reduce the tax to 35 percent while raising the exemption to $5 million. However, following a policy luncheon this week, key finance leaders disclosed any such agreement no longer existed.

Meanwhile, the current House proposal resurrects the 2009 estate taxes retroactively to January 1, 2010, allowing for a $3.5 million per person exemption and a flat rate of 45 percent. That proposal is exempt from the Pay-As-You-Go rules, while the lower Senate proposal would not be exempt from the Pay-Go rules.

"Either proposal is better than the limbo our clients are being left in," Whittenberg said. "Without clear indications of whether a retroactive tax will be instituted for 2010, how much of an exemption will be allowed, or what tax rates will be, those pursuing even the most basic planning face a number of uncertainties. We're still able to help families establish effective plans, but the situation could be so much better and more streamlined. Estate attorneys across the nation join me in calling on Congress to simply address this issue once and for all. Action is long overdue." 

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Serving clients throughout the Northeast region, attorneys at Whittenberg Knudsen, LLP focus primarily on estate planning, business law, and probate and trust administration and litigation. Attorney Whittenberg is recognized nationally for expertise in estate and tax planning. He is a partner of Whittenberg Knudsen, LLP, a founding member of WealthCounsel (a national attorney organization of approximately 1,500 estate and wealth strategies attorneys), and a former elected board member of the Member Advisory Board of the National Network of Estate Planning Attorneys.

Full post as published by Breaking Legal News on May 21, 2010 (boomark / email).