Just under the wire, Congress has enacted new tax laws with respect to federal estate, gift and generation skipping taxes. Under this law, beginning in 2011 the estate and gift taxes are reunified and the exclusion/exemption amount is set at $5 million per person. The maximum rate is reduced to 35 percent. The generation-skipping transfer tax exemption is also raised to $5 million, with a maximum tax rate of 35 percent. The act includes a "repeal of the repeal" of the prior estate tax laws, so for decedents dying in 2010, rather than there being no Federal estate tax, the fiduciaries may elect whether to subject the the estate to the previously existing laws or the new ones about to take effect. These provisions sunset at the end of 2012.
For an interesting analysis of the new estate tax provisions, see this article in today's New York Times: http://www.nytimes.com/2010/12/18/your-money/taxes/18wealth.html?emc=tnt&tntemail1=y.
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