New Estate Tax Law

There is estate tax is now unified with the gift tax-- $5 million per person. However, it applies only for 2011 and 2012. Couples need to keep their option to have an an irrevocable trust when the first spouse dies, just in case Congress does not extend the unified credit and the $1 million exclusion from 2002 comes back. For the estate of anyone who died in 2010, the $5 million automatically applies unless the 2010 law is elected. The new law allows for a step-up in basis which avoid capital gains tax, but applies a 35% tax for any assets over $5 million.