Estate Election in 2010
Prior to the passage of the Tax Relief, Unemployment Insurance Reauthorization and Job Creation act of 2010, all the talk was that if Congress did pass a bill to deal with the estate tax, that the personal representative would have the choice to choose between the no estate tax/carryover basis rules in place this year or use the 2009 estate tax rules ($3.5 million per estate with a 45% tax rate for everything above and a full step-up in basis).
However, Congress, as always, is unpredictable and passed a law which still gives the personal representative an election. The election is to have the estate be under this year’s estate tax rules (or lack thereof) or be treated under the 2011 rules. The 2011 rules allow a $5 million per person exemption with a 35% tax rate and a full step-up in basis. Further, the 2011 rules allow any unused exemption to be carried over to the surviving spouse to be used upon their death. This allows for more planning to be done upon the second spouse’s death and also gives some flexibility to planning for blended families.
To learn more about the new estate tax rules laid out in the Tax Relief, Unemployment Insurance Reauthorization and Job Creation act of 2010, please contact our Jacksonville estate planning attorney to discuss how these new rules could benefit you and your family.
