Congress unfortunately has again failed to address a “permanent” fix of the federal estate tax. Section 101 of the newly enacted Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (the Act) extends the Economic Growth and Tax Relief Reconciliation act of 2001 (EGTRRA) through 2011 and 2012 (with certain applications in 2010). In 2013, we’ll return to the same messy uncertainties we’ve been dealing with over the last few years.

This Tech Review addresses the effect of the Act on estate tax calculating programs and the need to revise those programs. It should be noted, also, that the Act will significantly affect estate planning and will require updates of the document assembly programs. The continued increase of the federal estate tax applicable exclusion will also affect practice building. Historically, the wide impact of the federal estate tax tended to generate estate-planning activity, which would then draw attention to the important issues of family solidarity and business succession. In the future, these issues may tend to be neglected in clearly nontaxable estates. Retirement planning, also, will tend to assume more practice significance as the event of death has less tax impact.