As reported in Forbes, congress has recently introduced two bills that would repeal the federal estate tax entirely. The two bills, S. 1183: Death Tax Repeal Act, and H.R. 2429: Death Tax Repeal Act of 2013, both aim to permanently repeal the federal estate tax. Senator John Thune, who introduced S. 1183, believes that the tax is necessary to allow family businesses to thrive when passed on to the next generation. As Sen. Thune explained, “[c]urrently more than 70 percent of family businesses do not survive to the second generation, and 90 percent of family businesses do not survive to the third generation.” Critics of the bills point out that there are many factors that go into the success or failure of a family business. The largest of these factors is a failure to create and implement a succession plan. Critics conclude that the estate tax cannot be entirely to blame for these failures. For a multitude of reasons, neither of these bills are expected to pass. Even if either of the bills were to pass, they would not have any affect on the vast majority of taxpayers. This is because the vast majority of American taxpayers are not subject to the federal estate tax because they simply have not amassed enough wealth in order to qualify. In 2013, the federal estate tax exemption is $5.25 million. If you would like assistance crafting your estate plan to minimize taxes, or for any other estate planning questions, contact Tatiyants Law P.C. at 818.956.9200.