Budget Resolution Provides Stronger Feel For Estate Tax Future

But Salaman says he is advising clients based on the budget resolution.

"We should definitely go forward," he says. "I never believed the estate tax would be repealed."

"Once a Democratic Congress was elected," he explains, "a consensus emerged that the estate tax would be retained in some form or other."

"Before the Democrats took over, we had experienced some pushback from clients, an attitude of 'let's wait and see what happens,'" he adds. "But now there is little pushback, and existing client resistance to some estate tax planning techniques is declining. We've always sort of assumed it would be there."

His clients include family limited partnerships that use second-to-die life insurance and other estate planning techniques, Salaman says.

A lawyer and lobbyist for an insurance company who asked not to be identified due to the sensitivity of the issue to the industry, says, "What is clear [from the budget resolution] is that the current law provision providing for full repeal of the estate tax will not go into effect."

"So the budget resolution is couched in terms of some form of estate tax reform, and not repeal," the lawyer and lobbyist says.

The lawyer and lobbyist also notes that the $3.5 million per-person exemption and 45% top tax rate is acceptable to the industry.

"While this would be a very favorable outcome from our perspective, it is important to note that it is not specifically in the budget resolution," the industry official says.

Salaman, who must advise clients, was more direct. "While these are not binding resolutions, and 'it ain't over till it's over,' the budget resolution is a current indication of what both Houses of Congress are thinking right now."

"It is not the law yet, and members of Congress can change their minds," he explains, but although "it is only a budget resolution and they may have a different view when it comes to the final vote, this indicates the current thinking in Congress."