The House of Representatives passed a bill extending the current estate tax levels and exemptions on December 3, a move to quash the impending 2010 complete repeal of estate taxes (at least for a year).
However, the Senate killed the bill, unable to garner enough support for a continuance of the $3.5mm exemption. Too many of them were in favor of raising the exemption to $5mm and in all the fuss and maneuvering they ended up not doing anything. Personally I think it made them look like Bozos because it was a simple easy fix, it kept in place a long overdue break that was started in 2001, and they weren’t locked into it. Isn’t politics just great?
So, does this mean that it is now open season on a good time to die? Remember that the way the law reads right now, estate taxes are repealed completely in 2010. If nothing changes and a person of substantial net worth dies next year, their family wins and the government loses.
One person I talked to today suggested that there are those that think they really have until September of next year to get something in place. This is a takeoff on the fact that the government allows up to 9 months to pay estate taxes after death. I’m not an attorney, but I know I would be hiring a very good one if a death in my family opened up the estate tax question and we did a timely filing for the estate showing no taxes due. Make reinstatement of those taxes retroactive and watch the tea partys go crazy.
I will be doing several posts and hope to have a guest post on this over the next several days. This is a big deal for those with taxable estates who have worked hard to make sure their estate remains solvent, generally with life insurance, to deal with the inevitable.
Bottom line. I think we will see a much quicker decision and resolution than 9/09. That’s just asking for more trouble than Congress really wants.