In 2006 the exemption amount for federal estate taxes is $2.0 million, in 2009 it goes up to $3.5 million. If the Republicans have their way, estate taxes will either disappear all together or essentially become inconsequential. The Democratic response is to freeze the estate tax exemption at the 2009 level.
Even in the absence of estate tax repeal, estates that are inconsequential for estate-tax planning purpose are already more than large enough for most families to litigate over. Moreover, demographic trends may soon lead to dramatic jumps in estate litigation.A March 2006 newspaper article entitled Law firms see rise in inheritance feuds, had the following to say about the expected increase in estate disputes as the World War II generation passes away leaving trillions to their children, the baby-boomer generation:
Legal disputes over inherited property are making headlines [locally and] . . . nationwide in the case of Anna Nicole Smith, a former Playmate of the Year. But the millions at stake in these high-profile lawsuits pale in comparison to the trillions of dollars of wealth that will be bequested, inherited and fought over in the next 50 years. As in-court arguments over inherited wealth become more common, law firms are strengthening their trust-and-estate litigation services to meet the demand.
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The perfect stormThe reasons for the flurry of trust-and estate-related legal battles are many.
According to an article in the Dispute Resolution Journal, an estimated $41 trillion of wealth will be transferred in the United States from the “Greatest Generation” to their kids, the baby boomers, between 1998 and 2052. The massive transfer in wealth alone is enough to spur more family feuds . . .* * * * *
Some lawyers say baby boomers seem much more willing to air their family problems in court than their parents were. Well-publicized trials also contribute to the rise in demand for estate litigation.