My Schedule for the Week of Nov. 3

Starting today, I will be posting about conferences and seminars I will be attending or presenting. Here's my schedule for the week of November 3 through 8:

Nov. 4 - Bernstein Private Wealth Symposium
Hotel Nikko, San Francisco 8:30 - 1:30. You can read more about it here. The Bernstein symposium will focus on the roots of the current financial mess, and the potential for opportunities. Since much of estate planning is about preserving wealth for future generations, this should be informative.

Nov. 6 through 8 - State Bar of California Taxation Section Annual Meeting
Grand Hyatt, San Francisco. This is a three day event covering all manner of topics related to taxation. I will be attending seminars on taxation related to estate planning, wealth transfer and other trust and estate related issues.

These two conferences should provide a host of topics for future posts. Stay tuned!

DOMA Challenged on First Amendment Grounds

Charles Merrill has filed a lawsuit with the Federal Tax Court claiming that the Defense of Marriage Act violates the Establishment Clause of the First Amendment to the U.S. Constitution. This comes to us from the Tax Prof. Blog.

The Establishment Clause is an interesting choice. I would have picked the Equal Protection Clause, since restricting marriage to a man and a woman would seem to deny same sex couples a fundamental right (to take advantage of certain tax laws such as the unlimited marital deduction). But what do I know?

I will try to follow this as best I can.

Obama and McCain on Estate Taxes

Yesterday was the last debate between Barack Obama and John McCain before the election. Although they did not tread much new ground in their comments, one area that was covered (at least a little bit) was taxes.

And speaking of taxes, what are the candidates positions on the estate tax? As I posted previously, Obama favors freezing the estate tax at the 2009 level ($3.5 million exemption, 45% rate), whereas McCain's plan is for a $5 million exemption and a 15% rate, which matches the capital gains tax rate.

A major issue, on which both candidates seem to agree is portability. Basically, it means that married couples could use their spouse's exemption in their estate. This was reported on in yesterday's Wall Street Journal. Here's how it would work: Currently, each spouse's estate gets an exemption (for 2008 it is $2 million, increasing to $3.5 million in 2009) before the estate tax is assessed. When one spouse dies, and they leave their estate to the surviving spouse, it passes free of taxes (note: this is for opposite-sex spouses only at the federal level, courtesy the Federal Defense of Marriage Act.) to the surviving spouse. The surviving spouse, however, only gets to use their exemption. For example, if Husband dies and leaves his $2 million estate to Wife, and Wife has an estate of her own of $2 million, she will now have an estate of $4 million, but currently only a $2 million exemption. If Wife were to die this year, she would have estate tax exposure on the $2 million she inherited from her Husband. With portability, she could use her husband's $2 million exemption and avoid estate tax exposure. This would make estate planning somewhat less complex for opposite-sex married couples.

The primary purpose of estate planning should not be tax avoidance, but in reality, it plays an major role. Even with portability, there are many non-tax reasons for trusts of various complexity. That's a post for another time.

Estate Tax plans of Obama and McCain

The Tax Prof Blog has posted about the proposed estate tax plans of the two candidates. Their feed is from an article in the Wall Street Journal.

Basically, Obama proposes to make the 2009 levels permanent. A $3.5 million exemption and a 45% tax rate.

McCain, while not advocating a total repeal, comes pretty close. He proposes a $5 million exemption and a 15% rate, which would match the capital gains rate.

Whatever your philosophy is on the estate tax, or taxes in general, at least we now have some guidance of how the estate tax question will shake out. I haven't shied away from my opinions in this blog, but right now, I'm not really in the mood. Besides, it's the Fourth of July. So stop thinking about taxes and go out there and have some fun! Celebrate the 232nd anniversary of our declaring our independence from Great Britain! Which was prompted by a tax revolt.

Alright, fine. Maybe the Fourth is about taxes.