The current Federal Estate Tax exemption (reflected as a credit equivalent) has increased to $2.0 million dollars, for decedents dying after January 1, 2006. This may affect the allocation between marital (Trust A) and by-pass trusts (Trust B or Credit shelter), depending upon the Trust language used in the underlying trust document. This may also affect the amount qualifying for the marital deduction and available for the surviving spouse. The exemption will increase to $3.5 million for decedents dying after January 1, 2009. Check back for more updates as Congress debates this important estate planning regulation.
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