Writing here back in November of 2006 I predicted that permanent reform of the estate tax was a very real possibility, and that such reform would likely mean a freeze on the estate tax at 2009 levels: $3.5 million exemption at a top rate of 45 percent.
As recently reported here by the North Carolina Estate Planning Blog, the U.S. Senate just approved an amendment to the Budget Resolution that would extend the 2009 estate tax rate (45%) and exemption ($3.5 million) through 2012. Under current law the estate tax would be "repealed" in 2010, but would return in 2011 with an exemption of only $1 million.
This latest Senate vote may not be a permanent fix, but if passed into law, it will get us passed 2010. In the same blog post cited above the North Carolina Estate Planning Blog also published an excellent analysis of the current state of affairs on the estate-tax front prepared by Marshall Jones of West Palm Beach, Florida. Well worth reading.