The American Taxpayer Relief Act of 2012 was signed into law by President Obama on January 2, 2013, to avert the so-called fiscal cliff. In addition to many other changes to existing tax laws, the Act makes several specific and substantial changes to the Federal Estate, Gift and Generation-Skipping Taxes, some of which are discussed below. [emember_protected custom_msg=”Click here and register now to read the rest of the article!”]
Generally speaking, the Act makes permanent the estate, gift and generation-skipping tax regimes existing in 2012. The Act makes the unified credit for estate, gift and generation-skipping taxes permanent at $5 million dollars per person (adjusted for inflation). From an estate planning standpoint, this means that with proper estate planning, a married couple can utilize each spouse’s unified credit amount, and essentially double the amount they can pass to the next generation tax free. For example, with proper planning, if both spouses die in 2013, it may be possible for them to pass $10.5 million to the next generation free of estate tax.
The Act makes the above amendment and other changes permanent, meaning estate planners now have a set of rules to work from for the first time in several years. However, the changes made by the Act will only be permanent for as long as Congress allows them to be. Who knows how long the certainty will last.
The above material is only a brief discussion of the topics mentioned, and you should consult with your estate planning attorney regarding your estate for specific advice relative to how the Act may affect your estate and estate plan.
column by DAVID G. FISHER
BIO: David G. Fisher was born and raised in Lake Wales, Florida. He received his B.S. in Finance from the University of Florida, cum laude, in 2003. He then received his M.B.A. from Stetson University and his law degree from Stetson University College of Law in 2006. David currently practices in the Peterson & Myers, P.A., Lake Wales office, primarily in the areas of real estate, corporate and business law, estate planning, wills and trusts, and probate. [/emember_protected]