At first glance, many people assumed that EGTRRA repealed the federal estate tax permanently. In fact, EGTRRA merely shrouded the federal estate tax in a veil of confusion. Though the law repealed the federal estate tax for 2010, the same law brought it back a year later, with much higher tax rates and a lower exemption amount. As a matter of fact, in 2011, it is scheduled to return with the same laws as it stood in 2001 — effectively turning the clock back on the estate tax savings that were enjoyed from 2002-2010. There is still talk in Washington of permanent reform of the estate tax, but other political events have taken center stage, so nothing is certain.

Even had EGTRRA permanently repealed the federal estate tax, the need for estate planning would remain viable for many reasons — both tax and non-tax. EGTRRA effectively shifted the tax burden from estate taxes to capital gains taxes levied against property when sold by heirs. EGTRRA also shifted the tax burden to the states which have been forced over recent years to raise their state estate and inheritance taxes, where applicable, to make up for lost revenues.