Now that the fiscal cliff has been averted — at least temporarily – there is widespread confusion about the effect on estate planning of the 11th hour tax law passed by the Senate on New Year’s Eve, and by the House of Representatives one day later. Mostly what Congress did in this arena was to make permanent the system that has been in effect for the past two years.
That was an important achievement: Without any action on their part, the tax-free amount would have automatically reverted to $1 million per person, and the rate for most estates would have gone up to 55%. But at the end of the day the only thing the lawmakers actually changed is the gift- and estate-tax rate, which has gone up to a top rate of 40% from a maximum of 35%.
Here are questions and answers on the federal estate tax after the fiscal cliff deal.
After The Fiscal Cliff Deal: Estate And Gift Tax Explained – Forbes