It's Baa-ack!The estate tax returns — but you probably won’t notice
There was no estate tax in 2010, but there is for 2011. Starting January 1, the first $5 million you leave to heirs is exempt from federal estate taxes; anything above that amount is subject to a 35% tax rate. And spouses can now pool their $5 million exemptions — meaning that married couples can pass $10 million to heirs free of federal estate tax.
As a result of these changes, 99.9% of Americans will not incur an estate tax, and many married couples who are subject to the tax can now save thousands of dollars in legal fees because the new law eliminates the need for a bypass trust. But don’t get too cocky: These changes in estate law expire at the end of 2012.
If you already have a bypass trust, talk with your attorney about the law’s implications.