HOUSE BILL EXTENDS CURRENT ESTATE TAX BY A VOTE OF 225 TO 200

SUMMARY: Congress has taken the first step in clarifying what will happen with the estate tax.  The House of Representatives voted Thursday (12/3/2009) to extend the current estate tax indefinitely.  If this measure is adopted by the Senate and signed into law by the President, it would make this year's rates permanent (i.e., exempting the first $3.5 million of an estate, or $7 million for married couples, and taxes inherited wealth above that at 45%, the same rate as the 2009 rate). If Congress does not act, the estate tax will disappear in 2010, then return in 2011 under the higher rates -- 55 percent and a $1 million exemption -- that existed before President George W. Bush took office.

Because of the immense attention being given to health care legislation, it is unlikely that the Senate will pass a bill before December 31, 2009.  It is widely believed that the Senate will vote to extend the current tax for a year in order to give them time to take up and fully debate the issue in 2010. This congressional first-step means another delay before people with large estates can effectively adjust their estate and legacy planning.

Click here to read the full December 4, 2009 Wall Street Journal Article.