Let's say your name is Richy Rich and you died with an estate valued at $50 million. If you died in 2009, you were able to pass $3.5 million to your heirs tax free, with an estate tax on the remaining $46.5 million. The tax (of 45%) would be almost $21 million.
Now let's say your name is Rachel Rich and you die with an estate valued at $50 million. But you died in 2010, not 2009. Because 2010 is the "Year to Die" for estate tax purposes and Congress has failed to change the existing law, you will be able to pass all $50 million to your heirs tax free (saving your heirs a hefty $21 million in taxes versus dying the year before!).
Congress was expected to change the law granting an unlimited exemption from estate taxes for 2010, but has thus far failed to do so. There is talk that the exemption could be reduced back to 2009's $3.5 million level (or an even higher $5 million, as the Republicans want), but Congress is in no rush because any changes can be applied retroactively.
Nevertheless, it is imperative that something be done soon as next year the estate tax rate goes back up to the 2001 level of 55% and the exemption amount goes back down to $1 million per person a level which will exponentially increase the number of estates subject to the tax (and cost Richy Rich an additional $7 million in taxes!).