Estate Tax Update

The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (2010 Act), signed into law on December 17, 2010, has changed the law relating to estate and gift taxes. Over the past ten years, due to an earlier change in the tax law, the estate tax exemption was substantially increased and the tax rate was reduced, culminating in the year 2010, in which there was no federal estate tax. That same law would have reinstituted the estate tax in 2011, reduced the estate tax exemption to $1 million and increased the maximum tax rate to 55%. The 2010 Act provides at least temporary relief from those measures. The most recent changes in the law, some of which are summarized here, could affect your estate plan.