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The fate of the federal estate tax likely lies in the results of the next election. Here are the most probable scenarios.

The fate of the federal estate tax likely lies in the results of the next election. Here are the most probable scenarios.

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    estate tax uncertainty continues estate tax uncertainty continues Presentation Transcript

    • Estate Tax Uncertainty ContinuesThe fate of the federal estate tax likely lies in the results of the next election. Here are themost probable scenarios. Place logo or logotype here, otherwise delete this. VIDEO LAW OFFICE OF DAVID PARKER BLOG PLLC
    •  The current estate tax, with a $5 million exemption and a 35% tax rate on estates above that, is due to sunset at the end of this year. Moreover, as everyone knows, it’s an election year. The president, every Representative, and many Senators are up for reelection. The outcome of the election will have major implications for the future of NY estate planning, but of course the new president (if there is one) and Congress won’t take office until 2013. President Obama and this year’s Congress will have to take whatever action is to be taken. Place logo or logotype here, otherwise delete this. VIDEOLAW OFFICE OF DAVID PARKER BLOGPLLC www.parkertrustlaw.com
    •  Given the inability of the two parties to work together since the Republicans took over the House, gridlock is a very real possibility. If that happens, the estate tax may revert to its pre- Bush levels of 55% on estates of over $1 million. Even those politicians who want to see an increase in the estate tax don’t really want to take it that far, although Congressman Jim McDermott of Washington has introduced a bill that would raise the estate tax to that level, adjusted for the aggregate inflation over the past decade or so. Place logo or logotype here, otherwise delete this. VIDEOLAW OFFICE OF DAVID PARKER BLOGPLLC www.parkertrustlaw.com
    •  It’s also possible that Congress will choose to punt – to kick the can down the road, so to speak. Obama might well sign a bill extending the current rates and exemptions for another year or two. Any such action would have to take place before the election, most likely. This would simply preserve the current situation until the new Congress and (possibly) new president are in office to make more long-term arrangements. Place logo or logotype here, otherwise delete this. VIDEOLAW OFFICE OF DAVID PARKER BLOGPLLC www.parkertrustlaw.com
    •  What all of this amounts to is the fact that the estate tax, with its immense implications for New York asset protection, is still up in the air. The same is true of gift taxes as well. Regardless of what happens in politics and law, it’s still important to make early and flexible estate plans. Having plans in place based on current law will not hurt even if the current law changes, but as always, the best course is to be aware of what’s going on and make plans early. Place logo or logotype here, otherwise delete this. VIDEOLAW OFFICE OF DAVID PARKER BLOGPLLC www.parkertrustlaw.com
    • Law Office of David Parker Estate Planning and Elder Law  www.parkertrustlaw.com