President Obama spoke about the future of federal estates tax during his recent bus tour through the Midwest. A family farmer expressed her concern about the pending return of the 2001 federal estate tax exemption in 2013. If Congress and the President fail to act, the federal estate tax exemption per person will drop to $1,000,000, commencing January 1, 2013. The exemption is currently $5,000,000 per person.
President Obama responded by indicating that he was willing to compromise with a $7,000,000 exemption per family. I think what the President was essentially referring to was a $3,500,000 exemption per person and the ability for a deceased spouse’s unused exemption to be transferred to a surviving spouse. This is consistent with what he has spoken about in previous campaign stops in 2008.
Curiously, the President also spoke about the tax code in general and said that the estate tax issue is part of the larger debate about the code. This signals that the President may foray into the tax code in 2012. There has been some speculation that the so-called “Super Committee” will take a close look at our tax code and make some recommendations in that regard. Finally, the President emphasized “basic fairness” in the tax code.
Bottom line. Don’t expect the President to support an elimination of the federal estate tax or death tax.
This post first appeared in The Estate Planning Guru, a blog by Fraser Trebilcock attorney Ryan Wilson on August 25, 2011. For more information, please contact Ryan at 1-800-748-0436 or firstname.lastname@example.org.