For the first time since 1915, the United States has no estate tax. And a lot of planners and their clients are left to deal with the uncertainty this situation has created.
Thanks to Congress’ inability to act before the estate tax lapsed at midnight on Dec. 31, we now have the potential for excessive litigation which will inevitably come to pass if Congress, sometime after reconvening on Tuesday, decides as many expect to restore the estate tax retroactively to Jan. 1. It will be argued that such a move is unconstitutional.
Of course this could have been avoided back on Dec. 16 if the Senate was able to take its health care reform blinders off for the equivalent of a millisecond and simply extend current estate tax law for three months, as requested by Sen. Max Baucus, D-Mont.
It didn’t happen, and while a mere extension would have left plenty of uncertainty as to the future of the estate tax, we now have all that uncertainty along with looming legal battles that could well extend all the way to the Supreme Court.