As you may know, the current estate tax law is a mess. A person dying this year can exempt $2,000,000 of assets from the estate tax (the exemption amount). In 2009, the exemption amount increases to $3,500,000. In 2010, there is no estate tax. That means even Bill Gates could die that year and his family would not pay an estate tax. However, in 2011, the exemption amount drops to $1,000,000. This would put many estate's in the bull's eye of a big tax (45%).

 

For years, the House has passed legislation to eliminate the estate tax, while the Senate has stalled. Now, in the midst of a dead heat presidential election season, the Senate has just passed a budget resolution. A budget resolution is not law, but it indicates the Senate's future intentions.
Finance Committee Chairman Baucus's amendment 4160 to the Senate Budget resolution was the only estate tax amendment to pass. It would make the 2009 law permanent — a $3.5 million exemption ($7 million per couple) with a 45% rate. It was approved 99-1.

This is good news. It shows the Senate, even during an electon year (or maybe because it's an election year)is paying attention to the heavy burden a $1,000,000 exemption amount will impose on millions of families. Let's hope their efforts are more than posturing and lead to a change in the law.