Will a new president, take everything you own? Read on to find out how a President Obama will affect your estate.

Estate planning gets little attention during an election. If we're honest, most of us would prefer to put off the subject for another day. We have a new president and his decisions will affect people's assets. What will President Elect Obama do to your estate plan?

Our minds have been on the election for months. Lately, people have been asking questions about how the new president will affect estate planning. One word --- taxes. The outcome of the election has a direct impact in regard to estate taxes. Most of us don't have a big concern about that right now, because the current estate tax exemption amount is $2 million. So unless your estate is worth more than $2 million in value, there will be no estate tax upon your death. If you are married, that means you can, with proper planning, use a marital deduction trust to protect up to $4 million from any estate tax.

You may remember that President Bush was in favor of eliminating and phasing out the estate tax altogether. Congress passed a bill to do accomplish that goal. Next year the estate tax exemption increases to $3.5 million. In the year 2010, the estate tax will be repealed.

President Bush hoped that the estate tax would be repealed for good. Unfortunately, Congress wants to revisit the issue in 2011, and bring the estate tax exemption back down to $1 million. Unless Congress takes action to extend the exemption, taxes will be due on any estate over $1 million.

What will happen in January of 2009 after we inaugurate a new president? President Elect Obama does not favor a complete repeal of the estate tax. He wants to keep the estate tax exemption at the current $2 million level.

Senator John McCain wanted the estate tax exemption to rise to $3.5 million. He also did not favor a complete repeal of the estate tax. In fact, neither presidential candidate wanted to repeal the estate tax. The biggest difference between Senator McCain and President Elect Obama is the amount of the exemption. Senator McCain favored the estate tax rate to rise to $3.5 million, allowing $1.5 million more in exemptions than President Elect Obama.

 

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