Folks have been worried for some time about the changes to the current estate tax system with the change in President. President Obama's current budget does make a coupld of significant changes to the current estate tax system.
First, the estate tax exemption for 2010 is replaced in toto. Previously, there was an unlimited exemption in 2010, which meant that no estates would be subject to estate tax. Now, that has changed, and the unlimited exemption has been removed for 2010.
Second, the estate tax exemption amount for 2010 and the following years has been changed to $3.5 million per individual. Thus, with proper estate tax planning, a married couple can shield $7 million from the estate tax.
While it would have been nice to have the unlimited exemption in 2010, the 2011 exemption is a significant increase from the $1 million exemption amount that was scheduled for those years. Thus, although there is some disappointment in this news, there is also a significant silver lining that will probably be a bigger benefit to more Americans.