The recent tax cut legislation, titled the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, carries a mix of good and bad news for estate planners and clients looking for an orderly (and tax-free) distribution of their assets. The good is that for 2011 and 2012 the estate tax exemption has been raised to $5 million per person, with a tax of 35% on assets above that amount. Moreover, it will be easier for married couples to use the full amount of both of their tax exemptions without resorting to devices such as a disclaimer credit shelter trust. The bad news, however, is that in 2013 the estate tax will return to 2001 levels, which will mean a $1 million exemption and a maximum 55% tax rate. I would like to say that Congress will act to permanently set the estate tax before 2013, but so far they have shown no inclination to do anything other than punt the issue down the road for future action. Expect more of the same in 2013. |
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Estate Tax "Fix" Not So Permanent After Allposted Dec 22, 2010 8:28 AM by Joseph Gagnon |