Estate Tax Repeal Could Leave Surviving Spouse Flat Broke

At least for now, the estate tax has been repealed for 2010. So you might be jumping for joy at the thought of your family not having to pay Geithner a toll if you die this year. However, you better check your will and trust documents closely, because without an estate tax you or your spouse could end up flat broke.

Clever estate planners directed many clients’ plans to pass assets not subject to the tax to the children. The balance of the estate would go to the surviving spouse estate-tax free because of the unlimited spousal exemption. In 2009, that would have meant $3.5 million to the children and the balance to the surviving spouse.

Well guess what? If you have this provision in your estate plan and die this year, your children will get it all with your surviving spouse getting nothing!

Right now Congress is up to their eyeballs with ObamaCare. And after it’s passed, which I can almost guarantee, our overseers in Washington will be looking under every rock for every last tax dollar they can find. One Senator even promises that there won’t be a window where wealthy individuals who die can escape paying estate tax this year.

In the meantime, you should review your estate plan and get with your attorney, because counting on Congress to act could be a risky bet.

Best wishes,

George