What the 2010 State Repeal Means

The Federal Estate Tax Has Been Repealed For 2010, But It Is Scheduled To Return In 2011 With An Exemption Of $1,000,000.

As of January 1, 2010, the Federal Estate Tax has been repealed! That's the good news. The bad news is that if Congress does not change the law, the exemption will be one million dollars beginning January 1, 2011.

The highest estate tax rate is also scheduled to increase to 55%. There have been attempts to pass legislation to prevent this, but all have failed. This means if your net estate were $2,000,000, the estate tax owed would approach $500,000.

This is not a time to panic, but it is a time for a close Trust review in 2010. Remember, your estate includes all of your assets and the proceeds from any life insurance policy you control.

Source: Michael Clark, Vaughn, Winton & Clark