This Wall Street Journal article has it. I REALLY like the idea, endorsed by both candidates(!), of making the estate tax exemption portable. Let me explain a bit about what that means:
There is an estate tax exemption -- right now it's $2 million, but it's going up to $3.5 million next year and, possibly, down to $1 million in 2011. (Don't ask -- it's a frickin' nightmare.) Anywho, the idea is that you can leave up to the exemption amount at your death, and it's free from estate tax. So, if I have $1.5 million in assets when I die, there's no estate tax. The problem is that there's also an estate tax marital deduction -- essentially (and I'm simplifying here), nothing you leave your spouse is subject to the estate tax. And if you get the marital deduction for your entire estate, you aren't using your exemption. This is a "use it or lose it" concept -- under current law, your spouse doesn't inherit your exemption. It's gone for good.
To give an example: what if I have $2 million, leave it all to my wife (who also has $2 million), and she then dies? Under this scenario, I had a $2 million exemption that I didn't use, and my wife dies with a $4 million estate and owes estate tax. My exemption is lost forever, unless I've taken steps to do some estate planning to take advantage of it. This is usually done by setting up trusts upon the death of the first spouse (for the benefit of the survivor), which allows the survivor the use of the property of the first spouse without the loss of the exemption.
The idea of portability is (presumably) that the exemption of the first spouse would be added to that of the survivor, so there's no need to set up a living trust for estate tax purposes. (There are, of course, lots of non-estate tax-related reasons to do so.) Hopefully this change to the law will be made no matter who wins the White House -- I'm sure that literally billions of dollars are "wasted" each year on fixing this problem, and billions of dollars more are lost to estate tax because people DIDN'T fix the problem.
