The return of the estate tax: Only six weeks to go

The midterm elections are over. There's a Lame Duck Congress on the Hill with plenty to keep it busy. And... only six weeks remain until the possible return of the federal estate tax.

By now, I thought for sure Congress would have given us clarity on where the estate tax is heading. Instead, we're still up in the air. It's nervewracking for clients and their attorneys, that's for sure.

I am advising my clients to assume that the estate tax will return on Jan. 1, 2011 at its 2000 levels. This would mean a tax on estates over $1 million and a top tax rate of 55%. Anyone who anticipates that their estate may be taxable should contact their estate planning attorney without delay to ensure that their existing plans are structured to take advantage of the $1 million lifetime exemption. More on tax-savings estate planning strategies.

You should also look into making year-end gifts. The tax code permits any individual to make gifts of up to $13,000 per year to as many people as he/she wishes. This is another way to reduce the size of your taxable estate. Also, you can make gifts in any amount if the money is paid directly to an educational institution or medical provider.

Stay tuned to this blog. If there's any news from Capitol Hill on the estate tax, you'll see it here. Good luck!