As we close in on 2010, the year that congress is slated to do away with estate taxes, is there anyone out there that really believes estates won’t be taxed after 2010?
Personally I believe the government will take action to leave the estate tax on the books. The good news is that the spousal exemption limits that were just over $600,000 in the year 2000 will likely be much higher, probably being capped somewhere between the current $2,000,000 and the 2009 proposed level of $3,500,000.
Let’s just pretend for a minute that the Federal government decides to follow through and repeal the estate tax in 2010. That would free everyone up to dump the life insurance policies that they have in place to pay estate taxes, right? WRONG!!
States are already seizing the day with the slack in the new exemption limits. Washington state has reared the ugliest head so far by instituting up to a 19% “death tax” on estates for Washington residents. If the repeal really did go through you can bet that the states, seeing an opportunity for new revenue, will fill the void before the ink on the repeal dries.
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