As of yesterday it appears that the President and Congress have reached a deal on a wide variety of tax issues. For the purposes of life insurance and estate tax the latest and most important news is the end to the repeal of estate tax and clear guidelines moving forward.

I’ve been following this closely for the last two years, watching, waiting, wondering how it would all shake out. My personal opinion is that no matter what party you belong to or believe in, this agreement is good news.

You may remember we left off in 2009 with the estate tax rate at 45% and the personal exemption at $3.5 million, making a marital combined exemption of $7 million. The new deal that appears poised to make it to the President’s pen would lower the tax rate to 35% (that’s huge) and increase the personal exemption to $5 million, a marital exemption of $10 million.

While the article insinuates that there will be a big chill in estate tax planning and estate planning life insurance sales, I don’t see that happening. There have been a lot of people on the fence over what to do or whether to do anything. There is still plenty of planning to do for those who have waited for the dust to settle and there isn’t much change in those who will see value in estate planning life insurance.

What this does is culminates the act of taking the load off of the self made millionaires that employ most of the American workforce. While they still face taxes and deadlines, with a $10 million exemption, far fewer will be impacted than if the estate laws had been allowed to roll back to the 2000 levels. More businesses will be passed on through the family tax free. Small business employment has one more monkey off its’ back.

One other thing to keep in mind is that this is a federal law change. The states, all of whom are hurting for cash, can wield their own axe on estates. It will be interesting to see what they do.

Bottom line. You can rest assured that someone will squawk about this. Compromise will never make everyone happy. As for me, I think it was a move in the right direction.

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