Good news for the wealthy, the estate tax has been set at 35 percent as part of the Bush tax cut extension signed off by President Obama on Friday.

The estate tax extension allows estates of $5 million per person and $10 million per couple to pass to heirs tax-free through 2012. Amounts over $5 million and $10 million would be taxed at the 35% tax rate.

Democrats were infuriated at the level at which the estate tax was set in the measure. So much so, that VP Biden made clear that the administration would oppose the extension of the 35 percent estate tax rate beyond 2012, even in an election year.

The wealthy and retired folks are the real winners. The estate tax is a bonanza – the exemption limit rises to $5 million per person (it was set to decrease to $1 million as of January 1) and the tax rate will drop to 35 percent from the 55 percent that would have occurred on New Year’s Day.

Estate tax attorneys are the losers. There aren’t many estates that are valued over $5 million.

source: cbs.com