California Estate Planning Blog by Kevin Staker

December 7, 2010

WOW! Estate Tax Exemption Will Be $5,000,000 With a 35 Percent Rate!

Filed under: estate tax,estate tax news,Kevin Staker — Kevin Staker @ 12:15 am
Tags: , ,

Well, shows I am not much of a prognosticator.  Senator Kyl, the Senate Republican negotiator, obviously decided to push one of his pet projects and got the Administration to accept much of his prior proposal with outgoing Senator Blanche Lincoln.  We will have for two years an estate tax exemption of $5,000,000 with a 35 percent rate on the excess.  Of course, it is not permanent.  However, the Feds have never lowered the estate tax exemption.  Hence, this will set quite a precedent.

One would assume the gift tax exemption will remain at $1,000,000.  One would also assume the generation-skipping transfer tax exemption will also be the $5,000,000.

I thought this might happen because Senator Kyl was one of the negotiators.  However, I failed to voice it in this blog and so cannot take any credit.

I am amazed the President and his liberal ideologue advisers agreed to this.  Most likely Treasury Secretary Geitner got him to agree because I would wager he has more than  a $1,000,000 or even $3,500,000 estate.

This is pretty amazing and historic news.

All for now while I get over the shock.

Kevin Staker



  1. Mr. Staker,

    Great work on this blog. I have it bookmarked, and have been looking at it multiple times every day for the past several weeks. This evening, I’ve had it on constant refresh.

    Call me a pessimist, but I think some liberal ideologues in Congress will prevent this deal from going through, especially given that their wrath is focused specifically on the estate tax portion of the deal.


    Comment by Ben — December 6, 2010 @ 10:07 pm | Reply

  2. Kevin, thanks so much for tracking this so closely during these interesting times! Do you know if the “election” part of the Kyl/Lincoln proposal (from earlier this year) is part of the current negotiated deal? Will it apply to 2010 decedents? I ask because Dear Old Dad is really at death’s door, in pitiful condition, and it would be a blessing if he went on to his reward pronto (92, totally demented, bedridden, agitated, can hardly swallow …) — do we have to hope he lasts until 2011, to get the “step up” on a 4.5M estate?(True situation)

    Comment by Sylvia A — December 6, 2010 @ 10:13 pm | Reply

    • Cannot tell yet if there are any other terms other than the exemption and the rate. Will post when I know. However, I doubt given the pushback by the Democrats in Congress that any other terms will be added. We shall see.

      Comment by kevinstaker — December 7, 2010 @ 10:34 am | Reply

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