Tax Law Changes Provide Big Opportunity For Estate and Gift Planning

The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 has opened a window of opportunity to avoid significant estate and gift taxes for 2011 and 2012. The Act, signed on December 17, 2010, has significantly increased the exemptions and decreased the maximum tax rates for estate, gift, and generation-skipping transfer (GST) taxes. The changes are only effective through 2012 and will reset again at the start of 2013.

President Obama signs the law into effect as members of Congress look on

For 2011 and 2012:

  • Estate, gift, and GST tax exemptions are each $5 million ($10 million per couple)
  • Maximum tax rate is 35%

Starting 2013:

  • Estate, gift, and GST tax exemptions are each $1 million
  • Maximum tax rate is 55%

These changes to the estate and gift taxes allow for many to better protect their assets and save considerable amounts on estate and gift taxes, specifically for assets and gifts in excess of $1 million. A $5 million dollar gift now could save you up to $2.2 million dollars in taxes compared to making the same gift after 2012. The same holds true for assets you want to designate to a beneficiary upon your death. Now is an opportune time to consider making gifts and changes to your estate planning. Not doing so could be very costly.


1.) Photo. White House Photographer. December 17, 2010. President Obama Signs the Act.

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