Читать книгу 2012 Estate Planning - Martin Inc. Shenkman - Страница 7

If you love roller coasters, there are only two places to go: Cedar Point in Sandusky, Ohio, or a visit to your estate planner.

The tax legislation enacted under President Bush, the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), made dramatic changes to the federal estate (and other) taxes. EGTRRA phased-down the estate and generation-skipping transfer taxes until they were fully repealed in 2010. That temporary repeal of the estate tax became an optional result for one year, spawning incredible complexity, but also some unbelievable tax windfalls. EGTRRA lowered the gift tax rate to 35 percent for 2010, but left the gift tax exemption at $1 million for 2010. These substantial tax reductions became known as the “Bush tax cuts.” The Bush tax cuts were scheduled to sunset or end in 2010 so that in 2011 the estate, gift, and the GST tax would all have increased. The GST exemption (a separate exemption amount that may be allocated to either lifetime or death transfers in order to minimize or avoid the GST tax) was scheduled to decline to $1 million, but that amount would have been indexed for inflation since 1997. The inflation-adjusted amount would have been $1,360,000. The estate tax exemption would have decreased in 2011 to $1 million. Finally, the estate, gift, and GST tax rates would have risen to 55 percent. Some believed that this increase in the estate, gift, and GST taxes would be detrimental to the economy and that lessening the sting of such an increase would support further economic recovery.

The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (the 2010 Act) P.L. 111-312, which became law on December 17, 2010, increased the estate tax exemption (the amount that a taxpayer can leave at death free from federal estate tax) from $3.5 million, as it was in 2010, to an unprecedented $5 million, inflation adjusted. The 2010 Act unified the gift and estate tax exemptions, increasing the gift tax exemption to an unprecedented $5 million, again inflation adjusted. In 2012, that amount is $5,120,000. As a result, any taxpayer can give away in aggregate (whether during life or at death) without a federal transfer tax over $5 million! This presents a tremendous opportunity to shift wealth that no one of means (including taxpayers with far less wealth than $5 million) should ignore. Now is truly the time for many taxpayers to act.

Many of the favorable extensions and tax law changes contained in the 2010 Act could end in 2013. Thus, the window of opportunity to act may soon be over.