by KYW's Salil Gutt
President Obama' s key piece of legislation will be a dramatic rewrite of the tax rules. All of the emphasis in the campaign was on income taxes but estate tax rules will also be changed. The President's past statements have indicated an amount will be determined for every individual to pass along through legacy without having it be subject to federal estate taxes. States will likely keep their same rules.
The exemption is projected to be around $3.5 million so a couple could transfer $7 million free of estate taxes. Now, just 1% of the nation's wealthiest will pay estate taxes. That's where the bulk of the money comes from even now.
There is a another subtle concept that has wide favor. It is called portability. Currently some families cannot take advantage of the full exemption amount because of incorrect titling of assets. Portability ensures that the surviving spouse can recapture the unused portion in their estates. This means that truly $7 million passes tax free.
One final point. As a result wills will get very streamlined for 99% of us eliminating the need for various trusts.
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