The Economic Growth and Tax Relief Reconciliation Act of 2001 considerably changed the laws governing national tax laws. While many of the changes impacted income taxes, they also affected federal estate and gift taxes. Because of the law, the Federal estate tax will be repealed in 2010 and then brought back the following year, unless Congress decides to extend the repeal. The reinstatement of the law in 2011 will bring back the Federal Estate tax to the way it was before the law was enacted. A skilled Estate Planning attorney can explain how these changes could impact you.

There are other changes that are being phased into the law and could affect you estate. These include:

• The estate tax exclusion amount, which was $675,000 in 2001, will gradually rise to $3.5 million in 2009
• The top federal estate tax bracket and GST rate was reduced from 55% to 50% in 2002, and will then gradually decline to 45% in 2007-2009
• The gift tax remains unaffected, but the top tax rate will also be reduced from 55% in 2001 to 35% by 2010
• Beginning in 2002, the lifetime gifting exclusion capped at $1,000,000