Until this year, Americans with estates exceeding $3.5 million were subject to a federal estate tax with a top rate of 45%. The federal law authorizing the estate tax, however, was set to expire on January 1, 2010; and to the shock of many, Congress neglected to reenact the tax. While the tax is scheduled to pick back up again in 2011, 2010 has thus far been the year without the estate tax.
The fact that our nation is now without an estate tax is surely met with mixed reception. For instance, The New York Times reported earlier this summer that a Texas oil tycoon passed a $9 billion estate to his heirs entirely tax-free. It is safe to assume that in saving close to $5 billion on estate taxes, this family welcomed the gap in the federal estate tax.
Not everybody, however, is pleased with the gap in the estate tax. For instance, Robert Rubin and Julian Robertson of the Wall Street Journal recently expressed their dissatisfaction that Congress has yet to reinstate the estate tax. They noted that the failure to reinstate the tax has already cost the nation billions in tax revenue, and suggested that Congress act immediately to reinstate the tax.
Because federal estate tax is an issue that personal representatives should consider, these changes in the tax law have had quite an impact on Arizona probate. While personal representatives are now relieved from dealing with the estate tax, this could very well change even before the end of the year if Congress decides to reinstate the tax sooner. To deal with these issues, as well as other Arizona probate law issues, personal representatives should consult with an Arizona probate lawyer.