At present tax planners are waiting for the US government to clarify the future of US Estate Taxes.

Effective January 1, 2010 the US federal estate and  generation-skipping transfer (GST) taxes were repealed, yielding the following results:

• George Steinbrenner, owner of the New York Yankees, passed away on July 13, 2010. His estate is estimated to save more than $500 million in estate taxes, a debt that may have forced the family to sell the team.
• Energy tycoon Dan Duncan died on March 28, 2010 with an estimated worth of more than $8 billion. His death in 2010 saved his estate an estimated $4 billion in estate taxes.

In the absence of congressional action, both taxes are scheduled to be reinstated in 2011 at 2001 levels, with a $1 million estate tax exemption and GST tax exemption of approximately $1,34 million.

Efforts to reach a congressional resolution continue, including the possibility of retroactively extending the 2009 rate and exemptions through 2011 to allow Congress more time to address the issue. However the passage of time makes the application of such a law more difficult and virtually guarantees long and drawn out litigation.

Most commentators predict that even if the repeal  remains in effect for all of 2010 it will not be extended, and that future estate tax rates and exemptions will be closer to the 2009 levels ($3,5 million exemption with a 45% top tax rate) than the scheduled 2011 levels ($1 million exemption with a 55% top tax rate).

We will continue to monitor developments and will provide an update as more information becomes available.