More On Legal & Compliancefrom The Advisor's Professional Library
- RIAs and Customer Identification Just as RIAs owe a duty to diligently protect their clients privacy and guard against theft, firms also play a vital role in customer identification. Although RIAs are not subject to an anti-money laundering rule, securities regulators expect advisors to address these issues in their policies and procedures.
- Registration Requirements for Investment Advisor Representatives (IARs) When individuals launch an advisory firm, they must avoid marketing themselves or the firm as investment advisors before they are properly approved and registered. Otherwise, they are subject to severe penalties.
Citing the need to reduce the deficit and restore some balance to the distribution of wealth in the U.S., the speakers asked Congress to act quickly and bring back the tax. The estate tax was progressively reduced and finally eliminated in 2010 through the Bush tax cuts, commonly referred to as EGTRRA, enacted in 2001. Currently the provisions of EGTRRA will reset in 2011 to a $1 million exemption for individuals and a $1.3 million exemption for family-owned businesses, and a 55% tax rate on estates over $1 million, with a 5% surcharge on estates over $10 million.
Despite calls for action in 2009, Congress failed to take any action on the estate tax, although several measures were introduced. Since the change scheduled at the end of 2010 is so drastic, with a restoration to the above-mentioned 2001 levels, it is anticipated that Congress will do something this year - although perhaps not as quickly as UFE asks; the group is calling for Congress to move on the issue before its August recess and to make permanent an estate tax set at 2009 levels "or stronger," with an index for inflation "to avoid coming back in ten years" to fix the issue again.
During the call, numerous aspects of the tax problem were discussed, including the effect the lack of an estate tax had on the incentive for charitable giving - Trumka cited a 23%-40% reduction in charitable giving in the absence of the tax - and the need for some sort of action before the end of 2010, as well as the possibility of making any legislation retroactive to cover estates currently untaxed in 2010.
More than 2,000 high-net-worth individuals have come out in support of the restoration of the estate tax.
Read about Sens. Lincoln and Kyl's recent estate tax proposal from the archives of InvestmentAdvisor.com.