After years of inaction, the December, 2010 lame duck Congress re-instated the United States gift tax and estate tax, reduced the rate from 46% to 35%, and raised the exemption amount for each taxpayer to $5 million, which exempts most U. S. taxpayers from the estate and gift tax ... for now. In yet another example of Congressional irresponsibility, they made this legislation effective for only two years, 2011 and 2012.
For taxpayers with estates greater than $5 million, 2011 presents a window of opportunity to optimize your planning with tools and strategies that will allow more of your estate to pass to your loved ones and charities, and less (or none) to the Internal Revenue Service. The IRS and the Congress regard some of these tools and strategies as "loopholes" and will seek to close them, so it is important that you visit with an estate planning specialist as soon as possible because most of the advanced tax strategies cannot be implemented overnight.
For taxpayers with estates ranging from $2 million to $3.5 million, uncertainty remains. No one knows if the tax-hungry Congress will keep the $5 million exemption after 2012, or reduce the exemption to prior levels. Most agree that it will never revert to $1 million, but for those affluent taxpayers with estates that are (or may grow to) $2 million or more, you will need to annually review your estate planning and contact your estate planning attorney.
The lame duck Congress also included a provision that many believe eliminates the need for "A-B Trusts" to protect the estate tax exemption of both married spouses. We believe such trusts (also called Marital-Family Trusts) still have value for many taxpayers, and that any couple who has such a plan should schedule a review-and-update meeting with their estate planning specialist as soon as possible.
Explosion of the Federal Deficit
To see what our economically illiterate Congresses and Presidents, especially the current President, are doing to our Country, our children and our grandchildren for generations to come, please click the following Link:
Please Note: Each taxpayer's share of the U. S. National Debt is now approximately $135,500--up from $128,000 in 18 months--and only
1/3 of the United States population
pays federal income tax!
Copyright Huddleston Law Offices, LPA Materials may not be reprinted or used without written permission
The subject matter information presented on this website is of a general nature, designed to provide an overview of various subjects, and most of it is not Ohio-specific. The authors, publisher and host are not providing legal, accounting, or specific advice to your situation.