What is the current status of Estate Tax, specifically as it relates
to the following situation: in an account held by a non-US person,
some assets are held US securities held at the time of death. My
understanding is that US estate law don't apply to cash, but do apply
to any US-based assets such as US securities.

Is that still the case, and what are the future plans regarding estate
tax in general?

Regards,
Patrick

Hello and thank you for your question.  Yes, unless there is a treaty
provision to the contrary, stocks and bonds of US-incorporated
companies are subject to estate tax.  Bank deposits are exempt.

More specifically:

In the case of a nonresident alien decedent, the US estate tax only
applies to property that is "located in the United States."

And unless a treaty provides otherwise you must use the following
rules to determine whether assets are located in the United States:

No matter where stock certificates are physically located, stock of
corporations organized in or under U.S. law is property located in the
United States, and all other corporate stock is property located
outside the United States.

Debt obligations are generally property located in the United States
if they are debts of a U.S. citizen or resident, a domestic
partnership or corporation, a domestic estate or trust, the United
States, a state or state's political subdivision, or the District of
Columbia.

The following deposits are treated as located outside the United
States if they are not effectively connected with conducting a trade
or business within the United States:
A deposit with a U.S. bank or a U.S. banking branch of a foreign
corporation.
A deposit or withdrawable account with a savings and loan association
chartered and supervised under Federal or state law.
An amount held by a U.S. insurance company under an agreement to pay
interest.
A deposit in a foreign branch of a U.S. bank. 

The citation for all the above is
Instructions for From 706-NA
http://www.irs.gov/formspubs/page/0,,id%3D10584,00.html

The estate tax rates used are the same as for U.S. citizens (this year
they range up to as much as 49%), but the unified credit is less.
Generally, the unified credit allowed is $13,000, which is the
equivalent of $60,000 of assets. This compares to the unified credit
of $345,800 for U.S. citizens, which is the equivalent of $1,000,000
in assets.
Federal Estate Tax
http://www.qa3.com/pageq/1,2278,100,00.html?action=custom&cid=72

That $60,000 credit equivalent amount is not scheduled to increase
until the currently-scheduled 2010 repeal of the estate tax.
Estate Planning
http://www.alaskalaw.com/EPTaxlawchanges.htm

Search terms used:
"estate tax" securities "nonresident alien" site:irs.gov
"estate tax" "unified credit" "nonresident alien"

Thanks again for bringing us your question.

Sincerely,
Google Answers Researcher
Richard-ga