Perhaps sensing that he faces a tough fight in  Congress, President Obama called his new plan ‘the right thing to do’ and pointed to revised economic forecasts to support his statement.

Is it though? There is plenty to annoy everyone, particularly Dems.

One group who might be happy, though are estate planners (provided such things as portability – where one spouse can use the other’s unused exclusion – and bypass trusts remain), even if it does mean that 99% of the population (and almost everyone in Congress) is not subject to estate tax. At the very least, it’s better than what they’ve had to deal with in the last year.

To deal with the uncertainty of whether or not a  deal was going to happen, estate planning attorneys in recent months have been gaming the system, drafting contingent gift plans which had wealthy taxpayers gifting out large portions of their estates on December 31, 2010 (assuming they lived that long), in anticipation of the return of 2001-era exemptions ($1.0 million) and tax rates (up to 55%) in 2011.

The thought there was that a straight up 35% gift tax on part of the estate was better than a tax of 55% on all but $1.0 million of the estate. To give it perspective, consider that for a taxpayer worth $20.0 million, gifting $10.0 million in 2010 meant paying a total of $8.45 million in tax ($3.5 million in gift tax, plus $4.95 million in estate taxes) versus $10.45 million if no gift was made and the full $20.0 million estate was taxed.

Now, with Obama’s estate deal, that same plan costs $5.25 million – an additional $3.25 million savings. Huzzah!

Granted, most of us don’t have $20.0 million lying around, but depending on where you live, it might not be too difficult to hit $1.0 million. So the additional $4.0 million exemption comes in handy. That is, if Congress ups the exemption to $5.0 million immediately…

Isn’t this fun?