In FAQs on the Death of the Estate Tax (Kiplinger, 12/18/09), Kevin McCormally summarized the current law and the changes that will take effect in 2009.
He provides Kiplinger's prediction regarding 2010:
Q. What does Kiplinger think will happen?
A. We expect that during 2010 (probably early in the year rather than later), Congress will retroactively reinstate the federal estate tax in a form very similar to the law that applies for 2009 -- that is, with a $3.5-million exemption (effectively $7 million for married couples) and a rate of 45%. It's possible that the exemption amount may increase, to as high as $5 million per person ($10 million for married couples), and the rate might be cut to as low as 35%.
McCormally also answers the following question, which is on everyone's mind:
Q. Is a retroactive tax increase constitutional?
A. The Constitution bans ex post facto laws, but the Supreme Court has allowed retroactive tax changes. Congress frequently approves tax decreases retroactively, and no one ever seems to complain. Although a law reinstating the estate tax would likely be challenged in court -- after all, big bucks are involved in the relatively few instances in which the tax is imposed -- we think it is highly unlikely that such a challenge would prevail.