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The Estate Tax for 2010

By Brett Danko, CFP^®

A tax act way back in 2001 allowed a very wealthy person to die in 2010 and pay no federal estate tax. Most experts anticipated that this law would be amended during the last half of 2009. Unfortunately, Congress was busy with the health care act at the end of last year and never managed to take care of this very important piece of legislation.

Most experts now feel that the federal exclusion will revert back to $3.5 million per person (its 2009 level). Congress is expected to pass this change by mid-year and have the law go retroactively back to January 1st 2010. Any time a law applies retroactively, it can create possible constitutional issues.

What will happen? Who knows?

I tend to agree with the experts that say it will revert to 2009 levels. Please stay tuned for any developments over the next few months.

In the meantime, specific questions should be directed to your estate attorney.

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